Govt tables demand seeking additional Rs.80,000 cr for bank recapitalisation
The Union Government on Thursday tabled a demand in the Lok Sabha seeking additional grants of Rs.80,000 crore for bank recapitalisation.
Finance Minister had on October 25, 2017, announced a massive Rs 6.92 lakh crore infrastructure spending and another Rs 2.11 lakh crore for bank recapitalisation to revive investments as well as growth.
The Centre's decision to pump in Rs 2.1 trillion of capital in public sector banks (PSBs) was aimed at reforming state-owned banks which are reeling under NPAs. A report by Fitch Ratings had then said that the recapitalisation plan announced by the government will provide substantial funds to the lenders to address the capital shortages.
Non-performing assets of banks had increased from Rs 2.75 lakh in March 2015 to Rs 7.33 crore as on June 2017.
The finance minister had said that banks would get Rs 18,000 crore under the Indradhanush plan. Under Indradhanush roadmap introduced in 2015, the government had announced to infuse Rs 70,000 crore in state-run banks over four years to meet their capital requirement in line with global risk norms, known as Basel-III.
BJP chief Amit Shah had hailed the Centre's announcement of bank recapitalisation and said the move will not just give an impetus to businesses, but also provide employment to the youth. He had also hailed the announcement on Rs 6.92 lakh crore spending on infrastructure.