Government infused over Rs 51,000 cr in public sector banks till December, Parliament informed

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Government infused over Rs 51,000 cr in public sector banks till December, Parliament informed

Centre has infused more than Rs 51,000 crore in public sector banks till December 2018, the Parliament was informed on January 4.

Finance Ministry said that close to Rs 51,533 crore have been injected in the PSBs till December 31, 2018 out of budgetary allocation of Rs 65,000 crore for 2018-19.

Government infused over Rs 51,000 cr in public sector banks till December, Parliament informed

The government had decided to provide capital support to the banks following their failing financial health on the back of mounting loans. Non-Performing Assets (NPAs) in the banking sector were close to Rs 10 lakh crore at the beginning of FY19. Of these, Rs 9.62 lakh crore were in the PSBs.

According to data provided by the government, NPAs have shown negative trend in FY19 and have reduced by Rs 23,860 crore between April-September 2018.

During the same period, banks have recovered Rs 60,726 crore, which is more than double the amount recovered in the corresponding period last year.

“Non-NPA accounts overdue by 31 to 90 days (Special Mention Accounts 1 & 2) of PSBs have declined by 61 percent over five successive quarters – from Rs. 2.25 lakh crore as of June 2017 to Rs 0.87 lakh crore in September 2018,” said Rajeev Kumar, secretary, Department of Financial Services has said.

In 2017, Centre had announced a massive recapitalisation programme which entailed infusing Rs 2.11 trillion in the banking sector through budgetary support, recapitalisation bonds and raising money from the market.

In December, during the on-going winter session in the Parliament, union finance minister, Arun Jaitley, had raised request for supplementary grants to the tune of Rs 41,000 crore to be infused in the banks.

 

source: businesstoday