State Bank of India reported a 41 per cent year-on-year (y-o-y) rise in its net profit during the December quarter to Rs 5,583 crore, which was driven by healthy income from retail loans and an Rs 11,000-crore recovery from Essar Steel, following its sale to ArcelorMittal.
Finance Minister Nirmala Sitharaman said in the Budget that government so far has infused Rs 3.5 crore capital into public sector banks (PSBs) to help them maintain regulatory capital requirements and finance growth plans. In the last Budget, the government had infused Rs 70,000 crore.
"We have infused Rs 3.5 crore capital into PSU banks. A few among them will be encouraged to move capital market for fundraising purposes", she said in her Budget Speech.
Finance Secretary Rajeev Kumar had earlier said banks have to tap the market and government would start gradually lowering its stake from the state lenders. In some of the state run banks, government stake nearly touches 100 per cent. Recently Punjab National Bank got board approval to raise Rs 1,000 crore from market through bonds. The IDBI Bank also proposes to raise Rs 1,500 crore from bonds to fund growth.
Among all four anchor banks, the Punjab National Bank was given Rs 16,091 crore, Union Bank of India Rs 11,768 crore, Canara Bank Rs 6,571 crore and Indian Bank Rs 2,534 crore. Merging entities, like the Allahabad Bank, was provided Rs 2,153 crore, while the United Bank of India got 1,666 crore and Andhra Bank Rs 200 crore.
Besides, the Bank of Baroda got a capital infusion of Rs 7,000 crore, Indian Overseas Bank Rs 4,360 crore, UCO Bank Rs 2142 crore, Punjab & Sind Bank 787 crore and Central Bank of India Rs 3,353 crore.
State Bank of India has already initiated the process of diluting stake in its subsidiary SBI Cards and Payment Services Ltd., and UTI Asset Management Co. Ltd. via planned initial public offerings. It is looking to sell 50 lakh shares representing 1.01 per cent stake in the National Stock Exchange. Life Insurance Corporation of India-controlled IDBI Bank too received additional capital of Rs 4,557 crore through the first supplementary demand for grants approved by the Parliament last month.
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