PSBs recapitalisation: Government to release 2nd tranche of funds soon

New Delhi: Government will release the second tranche of capital infusion into the public sector banks (PSBs) under its recapitalisation programme.

PSBs had given presentation to the government seeking further capital infusion . As per Zee Media sources, the central government will wait for the second quarter results of the PSBs before releasing the funds.

During the presentation, cash-starved Punjab National Bank (PNB) had put forward request for capital infusion of Rs 5,431 crore. Sources said that the government is reviewing the regulatory capital requirement before further fund infusion.

Last week, Finance Minister Arun Jaitley met the heads of PSBs to take stock of the mounting NPAs. He said bad debts or NPAs in the banking system are on the decline as recoveries of unpaid loans have picked up.

Financial Services Secretary Rajeev Kumar, who was also present in the meeting said banks expect to recover Rs 1.8 lakh crore through IBC and other routes during the current fiscal. The review meeting Tuesday discussed credit growth and asset quality, he said. The focus should now be on arresting fresh slippages, he said adding close to Rs 18,000 crore worth of non-core assets will be sold by PSBs this financial year.

The government last year unveiled an unprecedented Rs 2.11 lakh crore two-year road map for strengthening NPA-hit public sector banks, which includes re-capitalisation bonds, budgetary support, and equity dilution. Out of this, Rs 1.35 lakh crore will be through the recapitalisation bonds, while remaining Rs 76,000 crore from the budgetary support

(Reporter Inputs: Prakash Priyadarshi, Agency Inputs from PTI)