NEW DELHI: In order to raise funds from the market to meet their capital needs today the government said it has limited fiscal space to recapitalize PSU banks.
” Financial Services Secretary Hasmukh Adhia told reporters that government doesn’t have space to give Rs 20,000 crore for capital infusion … If banks require further capital they have other means to raise capital including from raising capital from market. Added there is no fiscal space and banks are adequately capitalised for the moment. Also no immediate need to raise funds from the market.
Finance Minister Arun Jaitley had given infusing Rs 7,940 crore funds to the public sector banks to enable them maintain adequate capital in Budget 2015.
For the present fiscal, the government had proposed capital infusion of Rs 11,200 crore. Even, against that the government disbursed Rs 6,990 crore to 9 public sectors banks BOB, SBI, PNB, and Indian Bank, Canara Bank based on their performance.
The government were allowed PSU banks to raise funds from markets by diluting government holding to 52 per cent in December 2014, In total Government’s charging 27 state-run banks range between 56 % to 84 %.
Government of India controls 22 through majority holding. In the other 5 banks, state-run SBI holds majority stake. As of now Public sector banks needs Rs 2.40 lakh crore by 2018 to meet global norms.