Sources said the ministry has almost finalized the names of potential candidates to infuse capital.
The Ministry of Finance is likely to invest Ministry 14,500 crore mainly in banks that are to improve their financial health in the next few days under the RBI’s Rapid Corrective Action (PCA) framework.
Indian Overseas Bank, Central Bank of India and UCO Bank are currently under this framework, which imposes a number of restrictions on them, including lending, management compensation and directors’ fees.
Sources said the ministry has almost finalized the names of potential candidates to infuse capital. The infusion will be made in the next few days, the sources said, adding the biggest beneficiary of this round will benefit the banks under PCA.
The capital infusion will help these banks to come out of the enhanced regulatory supervision or PCA framework of the Reserve Bank of India.
Most large state-owned lenders, including State Bank of India, Punjab National Bank, Bank of Baroda, Canara Bank, Union Bank of India and Indian Bank, have already raised money from various market sources, including share sale on a private. Appointment Basis.
For the current financial year, the government allocated 20,000 crores for capital infusion in PSBs to meet the regulatory requirement. Out of 12 PSBs, Punjab and Sindh Bank was given ₹ 5,500 crore in November last year.
The Parliament approved the ₹ 20,000 crore capital infusion at PSB as part of the first batch of supplementary demands for 2020-21 in September.
Earlier this week, LIC-controlled IDBI Bank was removed from the RBI’s PCA framework after a gap of nearly four years on improved financial performance.
The Reserve Bank of India placed IDBI Bank under the PCA framework in May 2017, as it gave a return on capital adequacy, asset quality (net NPAs were over 13% in March 2017), assets and leverage ratio.
The performance of IDBI Bank was reviewed by the Board of Financial Supervision (BFS) in its meeting held on February 18, 2021. It was noted that as per the results published for the quarter ended December 31, 2020, the bank has not dissolved RBI said PCA parameters on regulatory capital, net NPA and leverage ratio.
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