ministry may infuse about Rs 70,000 crore through recapitalisation bonds
in the non-performing asset (NPA)-hit public sector banks in the next four months, sources said.
Last month, Finance
Minister Arun Jaitley
had announced an unprecedented Rs 2.11 lakh crore two-year road map to strengthen public sector banks. The plan included recapitalisation bonds
of Rs 1.35 lakh crore.
Currently, the government
is in process of finalising the structure of bonds and decision could be made by the end of this month.
Once the structure is in the place, the government
would front-load bond issuance. The preliminary assessment indicates it could be between Rs 70,000 crore and Rs 80,000 crore, sources privy to the development said.
However, nothing has been finalised yet, the official sources said, adding that the finance
ministry would get better picture of requirements of various banks after the second quarter results are out.
of public sector banks alone have increased from Rs 2.75 lakh crore in March 2015 to Rs 7.33 lakh crore as on June 2017.
Besides recapitalisation bonds, the finance
minister had announced that banks would get about Rs 18,000 crore under the Indradhanush plan over the next two years. Under Indradhanush road map announced in 2015, the government
had announced to infuse Rs 70,000 crore in state- run banks over four years while they will have to raise a further Rs 1.1 lakh crore from the markets to meet their capital requirement in line with global risk norms, known as Basel-III.
In the last three-and-half years, the government
has pumped in Rs 51,858 crore capital in the public sector banks.
Remaining Rs 18,142 crore would be pumped into banks over two years.