7 PSU banks allowed to raise funds from mks
New Delhi: The Finance Ministry has given approval to seven public sector banks (PSBs) to tap markets for raising capital needed for expansion and meeting global capital adequacy norms.
The government had infused capital of Rs 14,000 crore during 2013-14 in 14 PSBs and decided to infuse Rs 6,990 crore in nine 9 PSBs during 2014-15, a Finance Ministry statement said.
“Further approvals have been given in 2014-15 to 7 PSBs to raise capital from the market,” it said.
However, the statement did not disclose names of banks which have got government approval for raising capital through market, not did it give quantum and timing of such public issues.
The Government decision to reduce the shareholding of PSBs to 52 per cent would also give these banks headroom to raise capital from the market.
All these efforts are being undertaken to allow the PSBs to meet the Basel-III capital requirements, it said.
Finance Minister Arun Jaitley in Budget 2015-16 had said: “The provision is for recapitalisation of public sector banks to enable them to maintain their Tier-I capital at comfortable level.”
“In order to raise funds, banks have been allowed to reduce government stake to 52 per cent,” he had said.
As par of the recapitalisation plan for the current fiscal, the largest public sector lender SBI gets capitalisation of Rs 2,970 crore, followed by BoB Rs 1,260 crore, PNB Rs 870 crore and Canara Bank Rs 570 crore.
Public sector banks require Rs 2.40 lakh crore capital by 2018 to meet global Basel III