However, the government does plan to make a separate allocation for the recapitalisation of PSBs in the General Budget likely to be presented in July
New Delhi: The Finance Ministry is going to review the capital infusion requirements of PSU banks only after September, sources said. However, the government does plan to make a separate allocation for the recapitalisation of public sector banks (PSBs) in the General Budget likely to be presented in July. According to sources, the interim Budget that was presented in February did not make any provision for recapitalisation because from April to July because banks were adequately capitalised till September.
Sources said that by September (end of Q2), the capital position with respect to regulatory requirements and growth of all the PSU banks which received funds in 2018-19 will be clear.
The banks that are still within the Reserve Bank of India's (RBI) Prompt Corrective Action (PCA) framework will also require capital infusion to walk out.
In 2017, the government had announced its Rs 2.11 trillion recapitalisation plan, in which Rs 1.35 trillion was to come from the sale of recapitalisation bonds and the remaining Rs 76,000 crore through the Indradhanush plan (Budgetary allocation) and fundraising from the markets by non-core assets sales.