No bail out package for PSU banks: Govt
The Government said there would be no bail out package for public sector banks as they have emerged strong.india Updated: Jul 11, 2006 18:03 IST
The Government on Tuesday said there would be no bail out package for public sector banks as they have emerged strong and even Punjab and Sind Bank, which required Rs 500 crore capital infusion last year, has come out of the woods.
"We are not proposing bail outs... Because as far as public sector banks are concerned, they do not require it," a top banking official said.
The Punjab and Sind Bank, which was the only bank that was tottering with large non-performing assets, have also started looking up and the annual results announced for 2005-06 showed the ailing bank has vastly improved.
"The additional capital (Rs 500 crore) has helped PSB tremendously. It is out of the woods now and fairly well positioned, even to the extent that RBI has lifted prompt corrective action, imposed on the bank earlier," he said.
Each and every public sector bank now is strong enough not to require bailout from the Government. "Even the banks, which are 100 per cent government owned are strong enough. Apart from PSB, the other three PSU banks with 100 per cent government equity are United Bank of India, Indian Bank, Central Bank of India," he said.
"I am fairly confident that PSB will also become stable by 2006-07," he said.
Bail out also means that there is not going to be any forced merger, he said. "We don't have requirement of the weak public sector bank being merged because otherwise it would be folded up," he added.