NEW DELHI, Feb 5: Government will finalise the second and final tranche of capital infusion for public sector banks (PSBs) for 2016-17 once all of them have declared results for the third quarter of the current financial year, a senior Finance Ministry official said.
As of now, only five of the 26 listed state-owned banks have declared their results for the October-December quarter of the current fiscal.
“We are working on the numbers. The third quarter numbers are not all in. The results are coming in and the information we have we are adding it up to our number crunching exercise,” the official said.
The government has already announced fund infusion of Rs 22,915 crore, out of the Rs 25,000 crore earmarked for 13 PSBs for the current fiscal. Of this, 75 per cent has already been released to them.
The first tranche was announced in July with the objective of enhancing their lending operations and enabling them to raise more money from the market.
“What has been left (of the budgeted fund) will be allocated as per the perceived need and of course for growth purpose,” the official said.
The capital infusion exercise for the current fiscal is based on an assessment of the compounded annual growth rate (CAGR) of credit expansion for the last five years, banks’ own projections of that and an objective assessment of the potential for growth of each PSB, the ministry had said.
Under Indradhanush roadmap announced last year, the government will infuse Rs 70,000 crore in state banks over four years while they will have to raise further Rs 1.1 lakh crore from the markets to meet their capital requirement in line with global risk norms Basel-III.
In line with the blueprint, PSBs are to get Rs 25,000 crore in each fiscal, 2015-16 and 2016-17. Besides, Rs 10,000 crore each would be infused in 2017-18 and 2018-19.
Finance Minister Arun Jaitley in Budget speech on February 1 announced capital infusion of Rs 10,000 crore for the next fiscal beginning April 1. (PTI)