Gangwar: 10 govt banks have submitted turnaround plans

Santosh Kumar Gangwar

The government on Tuesday said 10 public sector banks (PSBs), including IDBI Bank and Bank of India, have submitted their turnaround plans to be eligible for capital infusion. In a written reply in the Rajya Sabha, minister of state for finance Santosh Kumar Gangwar said Allahabad Bank, Andhra Bank, Central Bank of India, Dena Bank, UCO Bank, United Bank of India and Bank of Maharashtra are the other PSBs who have also submitted their plans, while Indian Overseas Bank is currently in the process of preparing its turnaround plan.

“It has been decided that any future capital infusion in these banks shall be subject to achievement of select agreed upon milestones as per turnaround plan on quarterly basis,” Gangwar said. “Banks that will not be able to deliver on the agreed upon turnaround plan for a period of two years will be identified as banks eligible for alternative recourse,” he added. The government has put in place a mechanism to monitor quarterly performance of these banks. SBI Capital Markets has been roped in to keep a watch on banks’ performance and keep the department of financial services informed about the progress.

Last fiscal, the government decided that one-fourth of the capital requirement of banks will be infused only after the achievement of certain goals fixed for them. As part of the Indradhanush scheme, the government has budgetted Rs 10,000 crore for the capitalisation of the PSBs in 2017-18, although it has made it clear that it could provide more funds should there be any pressing need for it. However, in a carrot and stick policy, any capital infusion will be linked to strict conditions from now on. FE