Finance Ministry is likely to seek Parliament's nod for more funds for PSU banks

By Pradeep Yuvaraj | September 2, 2011

A recent press report said that the Finance Ministry is likely to look for the Parliament’s nod for an additional Rs. 10,000-12,000 crore to recapitalize about half a dozen public sector banks this fiscal. Reports said that over and above Rs 6,000 crore has been allocated in the budget.

Mr. D. K. Mittal, Financial Services Secretary said that the total amount required for recapitalizing public sector banks, including SBI, in the current fiscal is Rs 16,000-18,000 crore. He said that they were looking at second supplementary. He added saying that there were 5-6 banks in need of capital.

Reports said that the Government has allocated Rs 6,000 crore in the Budget for capital infusion in the state-owned banks during 2011-12 and the additional amount would be sought through second batch of supplementary demands for grants to be tabled in the Winter Session of Parliament.

Mr. Mittal said that Rs. 6,000 crore would be given to the selected PSU banks after October 31 as it is the date by which the committee is likely to finalize its recommendations. He said that all public sector banks and regional rural banks (RRBs) will be fully capitalized and that the committee has already decided to adopt the Basel III capital adequacy norms in a phased manner from 2013.

The committee was set up by the Finance Ministry to draw strategy for re-capitalization of public sector banks. It is headed by Finance Secretary Mr. R. S. Gujral.

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About Pradeep Yuvaraj

Pradeep Yuvaraj is a Co-Founder and Director at Finerva Financial Solutions Private Limited, a financial education company focused on personal finance education. He has penned over 250 articles relating to Personal Finance and clocked over 500 hours of educating individuals on managing personal finance. He is a serial entrepreneur and has been associated with 7 Start-ups. His entrepreneurial experience spans industries as varied as Education, Gas Engineering, Automobile Design, Software development and more recently a Pure play presentation design company. Prior to turning entrepreneur in 2005, he has worked for 3 of the top ten companies of the world - Shell, ExxonMobil and Total SA. This experience included handling Branch Operations, Channel Sales and Business Development across 5 states over a period of 8 years. He holds an MBA from Symbiosis and an Electronics Engineering Degree from the University of Pune.

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