Finance Ministry to seek additional Rs 10,00 crore fund for PSBs

The Finance Ministry on Friday said it will seek additional Rs 10,000 crore fund for recapitalisation of public sector banks (PSBs) for meeting global capital adequacy or Basel III norms.

This would be over and above Rs 11,200 crore announced in the Budget 2014-15.

"We are seeking additional Rs 10,000 crore for bank recapitalisation this year," Financial Services Secretary G S Sandhu said in the national capital.

On whether the government is contemplating bringing down its equity from 58 per cent to 52 per cent in PSU banks, he said the ministry is in the process of seeking the Cabinet nod for it.

"We will seek Cabinet nod to reduce government stake in PSBs to 52 per cent by end of November," he said.

The government shareholding in state-owned banks varies from 56.26 per cent (Bank of Baroda) to 88.63 per cent (Central Bank of India).

The government has infused Rs 58,600 crore between 2011 to 2014 in the state-owned banks.

Finance Minister Arun Jaitley in the Budget speech had said that "to be in line with Basel-III norms there is a requirement to infuse Rs 2,40,000 crore as equity by 2018 in our banks. To meet this huge capital requirement we need to raise additional resources to fulfil this obligation".

While preserving the public ownership, the capital of these banks will be raised by increasing the shareholding of the people in a phased manner through the sale of shares largely through retail to common citizens of this country, the minister had said.