Decision on banks’ capital infusion by June-end: Govt

The government will take a view on further recapitalisation of state-owned banks by June-end to help them enhance business growth and meet capital adequacy norms.

The government will take a view on further recapitalisation of state-owned banks by June-end to help them enhance business growth and meet capital adequacy norms.

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“End of May or may be by the end of June we will have fairly clear picture as to which bank have to be capitalised and how much,” said D K Mittal, financial services secretary, when asked about the timeline of capital infusion into public sector banks.

“All banks (public sector banks), we have said, should be touching 9% of Tier-I capital and State Bank of India should be touching 11%. This is the strategy,” Mittal said on the sidelines of a CII event here. “The provision, which is there this year (for recapitalisation of banks) that will be available only when the Budget has been passed.”

The Budget has made a provision of R14,588 crore towards recapitalisation of public sector banks in 2012-13.

The government had infused R12,000 crore into public sector banks in 2011-12 to enable them maintain a minimum Tier I at 8% as on March 31, 2012, and also to increase shareholding of the government in the banks to 58%.