Govt announces Rs 2.11 lakh cr capital infusion for NPA hit public sector banks

The government on Tuesday announced an aggressive Rs 2.11 lakh crore capital infusion for the NPA hit public sector banks over a period of two years.

Out of this, Rs 1.35 lakh crore will be through the recapitalisation bonds, while remaining Rs 76,000 crore from the budgetary support, Financial Services Secretary Rajiv Kumar said in New Delhi.

Addressing media, Finance Minister Arun Jaitley said the capital infusion would be done over the next two fiscal.

He also said the capital infusion would be accompanied by series of banking reforms which would be spelt out in the next few months.

The nature of the bonds and details of the bonds would be made public during course of time, he said.

Non-performing assets of banks have increased from Rs 2.75 lakh in March 2015 to Rs 7.33 crore as on June 2017.

The finance minister said 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.

In line with the plan, public sector banks were given Rs 25,000 crore in 2015-16, and similar amount has been earmarked for the following years. Besides, Rs 10,000 crore each would be infused in 2017-18 and 2018-19.