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About six public sector banks (PSB), including the Punjab National Bank (PNB) that was affected by the Nirav Modi scam, could receive an injection of capital of about 80 billion government rupees, reported Tuesday, citing a senior official of the anonymous Ministry of Finance. These banks are likely to be below regulatory capital requirements.
The official told the financial daily that some banks that issued additional Tier 1 capital bonds, with the interest payments due, would not be allowed to make the required payments if they did not meet the standards. regulatory capital. The government, however, can not allow PSB to default on these payments, which would have an impact on their rating, added the official.
Another anonymous official told the financial daily that some banks that were placed under the prompt Reserve Action of the Reserve Bank of India would also benefit from this capital injection tour.
The ICRA, the financial daily, reported that of the 15 PSBs who reported their results for the 2018 fiscal year, only five declared a Tier 1 capital position close to the end of the year. minimum regulatory requirement of 7%.
In May of this year, the Ministry of Finance began the process of determining the amount of capital to be injected into PSB this fiscal year as part of the second cycle of recapitalization. The Financial Services Department wrote to the PSBs to obtain updated information on the implementation of the Center's reform program, which was an important parameter for the allocation of funds to banks. the implementation of the reform agenda in 30 points by May 11, "said a senior official of the Ministry of Finance at Business Standard at the time.
In January of this year, the Center announced a Rs in 20 PSB, with a significant share in the weakest banks to meet their own capital requirements.
As previously reported, in the recapitalization plan, eleven banks facing rapid corrective action by the RBI were to receive Rs 523 billion in FY18. The relatively healthier banks were to receive Rs. 358 billion thanks to the recapitalization obligations.
The bank recapitalization obligations of 1.35 trillion rupees, which were to be issued during the fiscal year18 and the current fiscal year, are part of a larger one. program for the recapitalization of banks abroad . Apart from the recapitalization obligations, the Center was to pay a total of Rs 180 billion a year and year, while the remaining banks were to mobilize the remaining Rs 580 billion.
Last October During the year, the government unveiled support of 2.11 trillion rupees for PSB, grappling with the increase in impaired loans, to stimulate real loans infrastructure for upcoming megaprojects.
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