Finance Minister Arun Jaitley said on Tuesday that the government has not yet settled on the exact recapitalisation figures for the public sector banks.
“I have not decided on the recapitalisation figure. I had mentioned the figure in the budget this year. But what we require would be much more than mentioned in the budget,” Mr. Jaitley told reporters on the sidelines of a public event at the Stanford University where he spoke about India’s economic future.
During his Budget speech this year Mr. Jaitley had promised a capital infusion of Rs.7,940 crore during the year. Earlier this month, during his annual review of banks, Mr Jaitley had said that the heads of the banks had made a strong case for increased capital and that the government was seriously looking into it.
On Monday, Finance Secretary Rajiv Mehrishi said that the government intends to provide around $9 billion towards the recapitalisation of public sector banks.
“What we are aiming at is an infusion of about $3 billion in the current year and perhaps twice as much in the next year. So, that is the broad time schedule — whether it will happen in August or January I can’t say,” he said.
Mr. Jaitley went on to praise the performance of the public sector banks.
“In promoting Indian businesses including infrastructure and when we are trying to push stalled projects, the public sector banks have had a positive role. Secondly their strength and network is huge. Thirdly the good sign is that the private sector banks are also coming up in competition. The fourth factor is that public sector banks in social responsibilities have done tremendous jobs. The private sector banks have lagged behind (here),” he said.
In February, the government had announced an infusion of Rs.6,990 crore in nine public sector banks, including the State Bank of India and Punjab National Bank, based on new efficiency parameters such as return on assets and return on equity. Mr. Jaitley did not mention these parameters either when he announced added capital infusion in his Budget speech or on Tuesday.
[“source – thehindu.com”]