The government has already announced fund infusion of Rs 22,915 crore, out of the Rs 25,000 crore earmarked for 13 PSBs for the current fiscal. Of this, 75% has already been released to them.
The first tranche was announced in July with the objective of enhancing their lending operations and enabling them to raise more money from the market.
"What has been left (of the budgeted fund) will be allocated as per the perceived need and of course for growth purpose," the official said.
The capital infusion exercise for the current fiscal is based on an assessment of the compounded annual growth rate (CAGR) of credit expansion for the last five years, banks' own projections of that and an objective assessment of the potential for growth of each PSB, the ministry had said.
Under Indradhanush roadmap announced last year, the government will infuse Rs 70,000 crore in state banks
over four years while they will have to raise further Rs 1.1 lakh crore from the markets to meet their capital requirement in line with global risk norms Basel-III.
In line with the blueprint, PSBs are to get Rs 25,000 crore in each fiscal, 2015-16 and 2016-17. Besides, Rs 10,000 crore each would be infused in 2017-18 and 2018-19.
Minister Arun Jaitley in Budget speech on February 1 announced capital infusion of Rs 10,000 crore for the next fiscal beginning April 1.
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.