State Bank of India, Punjab National Bank, Indian Overseas Bank and 10 other public sector banks got capital of Rs 22,915 crore from the Centre on Tuesday to help expand their lending services and raise funds from the market, reported PTI. This is the first time this financial year that the National Democratic Alliance government has infused funds into the sector.
The Finance Ministry announced the development in a statement, which went on to say that the government will consider providing more funds to the banks this fiscal, depending on their performance. “75 per cent of the amount... is being released now to provide liquidity support for lending operations as also to enable banks to raise funds from the market. The remaining amount, to be released later, [will be] linked to performance with particular reference to greater efficiency, growth of both credit and deposits and reduction in the cost of operations,” read the statement.
State Bank of India got Rs 7,575 crore, followed by Indian Overseas Bank, which got Rs 3,101 crore and Punjab National Bank received Rs 2,816 crore. Other beneficiaries include Bank of India (Rs 1,784 crore), Central Bank of India (Rs 1,729 crore), Syndicate Bank (Rs 1,034 crore), UCO Bank (Rs 1,033 crore), Canara Bank (Rs 997 crore), United Bank of India (Rs 810 crore), Union Bank of India (Rs 721 crore), Corporation Bank (Rs 677 crore), Dena Bank (Rs 594 crore) and Allahabad Bank (Rs 44 crore).
While presenting the 2016-'17 Budget, Finance Minister Arun Jaitley said the government could provide Rs. 25,000 crore for recapitalisation of the national banks. “If additional capital is required by these banks, we will find the resources for doing so. We stand solidly behind these Banks,” Jaitley had said.