Bank recapitalisation: Govt to monitor loans above Rs 250 crore
The capital infusion plan for the FY18 includes Rs 80,000 crore through recap bonds and Rs 8,139 crore as budgetary support
Finance Minister Arun Jaitley today said under the government`s bank recapitalisation plan, all loans above Rs 250 crore will undergo special monitoring.
Jaitley said the government has taken various steps to ensure that the PSBs follow higher standards. The government has two objectives in recapitalisation plan -- which bank would get how much money .
The capital infusion plan for the FY18 includes Rs 80,000 crore through recap bonds and Rs 8,139 crore as budgetary support.
The finance minister announced a Rs 2.11 lakh crore recapitalisation of PSBs in October 2017.
"I have already moved a supplementary grant in Parliament on this. The entire objective of this exercise has been that it is government`s prime responsibility to keep PSBs in good health," Jaitley told reporters at a press meet.
"We inherited a very major problem," Jaitley said, adding the problem is of the past and his government's objective was to find solution and create an institution so that the mistakes were not repeated.
The government has decided to give Rs 8,800 crore to State Bank of India, Rs 5,375 crore to Bank fo Baroda, Rs 4,865 crore to Canara Bank and Rs 4,524 crore to Union Bank, among various other PSBs.
"There are 21 PSBs in the country that comprise 70% of the banking industry. As discussed earlier this recapitalisation will be front loaded depending on the performance and merit of the PSB," said Rajiv Kumar, Banking Secretary, who was also present at the conference.
Allaying fears, Kumar said: "Depositors` money in PSB is safe."
India will ensure that all of its public sector banks are well capitalised , said Kumar while unveiling details on the government`s massive bank recapitalisation plan aimed at tackling record bad debt woes.