Capital infusion in banks to be completed by March end

Ruling out the State Bank of Indias rights issue this fiscal,the government said that it plans to infuse Rs 3.5 lakh crore in the next 10 years.

Ruling out the State Bank of Indias (SBI) rights issue this fiscal,the government on Tuesday said that it plans to infuse Rs 3.5 lakh crore in the next 10 years. It said that capital infusion in public sector banks including State Bank of India would be done by the end of the current fiscal.

The requirement in different scenario for all public sector banks is between Rs 10,000 crore to Rs 20,000 crore…whatever the requirement it will be met by the end of March 2012…you rest assured banks will get money by the end of this fiscal, Financial Services Secretary D K Mittal said after meeting of Committee on Capital Requirements of Financial Institutions including Banks.

He added that Rs 3,500-4500 crore would be infused in SBI to meet capital adequacy norms.

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In the budget 2011-12,Rs 6,000 crore have been allocated for capital infusion in the state-owned banks and the additional amount would be sought through second batch of supplementary demands for grants to be tabled in the winter session of Parliament.

You will have additional provision coming in December (through supplementary demands for grants), he added. He said that there are 5-6 banks which need capital this fiscal. The committee headed by Finance Secretary R S Gujral is expected to finalise roadmap for capital infusion by the end of this month.

After the meeting,Gujral said that another round of meeting on the issue will be held next week.

Mittal also added that the country has decided to adopt the Basel III capital adequacy norms in a phased manner from 2013. We want to capitalise banks well in advance, he added.

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The government during 2010-11 had provided capital support to the tune of Rs 20,157 crore to public sector banks such as Punjab National Bank,Bank of Baroda,Union Bank of India,Oriental Bank of Commerce and UCO Bank.

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