Finance Ministry Assessing Capital Requirement of PSU Banks: Report
New Delhi: The Finance Ministry has asked public sector banks to submit their immediate and mid-term capital requirement from the government to comply with global capital adequacy norms and also to fund their growth plans.
"Besides current fiscal need, banks have been asked to submit five-year capital requirement," sources said.
The government has started assessment of capital requirement of public sector banks. It has already received presentations of six public sector banks-- UCO Bank, United Bank of India, Allahabad Bank, Punjab National Bank, Punjab & Sindh Bank and Oriental Bank of Commerce.
Presentations by State Bank of India, Union Bank of India, IDBI Bank and Central Bank of India were made today while Bank of India, Bank of Baroda, Dena Bank and Bank of Maharashtra would make their presentations tomorrow in Mumbai.
South-based Andhra Bank, Indian Overseas Bank, Corporation Bank, Canara Bank, Syndicate Bank and Vijaya Bank would make presentation on July 3 in Bengaluru.
The presentation includes overall fund raising roadmap, including from internal accrual, selling of their non-core assets, divestment of government stake and fund support from the Centre.
Last year, Finance Minister Arun Jaitley had said that to be in line with Basel-III norms, there is a requirement to infuse Rs 2.40 lakh crore as equity by 2018 in public sector banks.
Keeping the huge capital requirement in the mind, the Union Cabinet in December 2014, allowed public sector banks to raise up to Rs 1.60 lakh crore from markets by diluting government holding to 52 per cent in phases so as to meet Basel III capital adequacy norms.
The Cabinet asked the PSBs to broad base retail shareholding while going in for the fund raising.
Out of 27 PSBs, Government of India controls 22 through majority holding. In the remaining 5 banks, state-run SBI holds majority stake.
Last fiscal, the government infused Rs 6,990 crore in nine public sector banks, including SBI, Bank of Baroda, Punjab National Bank for enhancing their capital and meeting Basel III norms.
The total government support provided to PSU banks towards capitalisation during the past four years was Rs 58,634 crore.
