Finance minister Pranab Mukherjee announced infusion of Rs. 15,888 crore into public sector banks as part of the recapitalisation exercise in 2012-13. The amount will help banks strengthen their balance sheets and maintain their capital adequacy ratio — the ratio of the bank's capital and its risks.
It would also push credit growth for banks that have been facing liquidity crunch.
"It will provide the much required push to the balance sheets and also take care of the credit growth for 2012-13," said TM Bhasin, CMD, Indian Bank.
The government would examine the possibility of creating a financial holding company, which would help, in raising resources to meet the capital requirements of state-owned banks.