- The government is likely to infuse more money in state-run banks amid crackdown on bad loans and increasing capital needs under Basel III guidelines.
- According to a Reserve Bank of India estimate, banks will need capital infusion of Rs 48,000 crore in the current financial year. This is nearly five times the Rs 10,000 crore allocated by the government.
- Banks will need to make hefty provisions as they take more nonperforming assets or NPAs for resolution under the new bankruptcy law.
- Under the Indradhanush road map, a seven-pronged revamp plan, state-run banks were to raise Rs 1.8 lakh crore from the markets for capitalisation.
- Rating agency Moody’s had said in a report that 11 PSBs will require external equity capital of Rs 70,000-95,000 crore to meet Basel III capital adequacy requirements, much higher than the government’s budget of Rs 20,000 crore for capital infusion till 2018-19.
via Bankruptcy law: Government likely to pump more money into PSU banks – The Economic Times
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