Govt to infuse over Rs 88,000 crore in 20 public banks as part of recapitalisation plan
Finance Minister Arun Jaitley on Wednesday charted out the government's recapitalisation plans, underlining that all loans above Rs 250 crore will undergo special monitoring.
The capital infusion plan for 2017-18 includes Rs 80,000 crore through recap bonds and Rs 8,139 crore as budgetary support.
"We have announced 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 governments prime responsibility to keep PSBs in good health," Jaitley told reporters at a press meet.
Out of the total PSU banks IDBI Bank emerged as the biggest beneficiary today as the bank was allocated a whopping Rs 10,610 crore followed by Bank of India (Rs 9,232 crore), SBI (Rs 8,800 crore), UCO Bank (Rs 6,507 crore) and Central Bank (Rs 5,158 crore).
Jaitley said steps need to be taken to ensure governance of banks follows highest standards and there is a need for institutional mechanism to ensure past is not repeated.
"We inherited a very major problem and therefore, we have been involved in finding a solution to that problem", he said, adding that "our role really is not only to find a solution but also to create an institutional mechanism to make sure that what happened in the past is not repeated".
"Now the entire object of this exercise is that the government has the prime responsibility of keeping the public sector banks in good health," Jaitley said.
Announcing a slew of measures as a part of the reforms, financial services secretary Rajeev Kumar said government will ensure that all PSBs are well capitalised.
Public accountability of PSBs. Independent agencies to evaluate and rank PSBs annually on reforms spurring Competition, showcasing Transparency. #PSBRecapAndReforms #compliance #banksurvey @PTI_News @PIB_India @PMOIndia @FinMinIndia @DDNewsLive @DDNewsHindi pic.twitter.com/aJ2eFxWjP7— Rajeev kumar (@rajeevkumr) January 24, 2018
The other major announcements made by the government include an 'annual report card' for each of the PSBs and providing banking facility at all corners of the country within a radius of 5 kilometres.
NO EASY MONEY : Recap dependent on Performance & Reforms. EASE-Enhanced Access & Service Excellence. Repositioning PSBs for #NewIndia.#PSBRecapAndReforms @PTI_News @PIB_India @PMOIndia @FinMinIndia @DDNewsLive @DDNewsHindi pic.twitter.com/93EwrfdXAJ— Rajeev kumar (@rajeevkumr) January 24, 2018
The government also listed a six-fold roadmap for banking reforms in the country which. The financial secretary said these reforms will facilitate ease of banking and encourage clean business.