Government to put more capital in public sector banks: Jaitley
GURUGRAM: Finance Minister Arun Jaitley on Sunday mentioned the federal government has determined to inject extra capital in state-owned banks to strengthen the banking system and spur financial development.
Final month, the federal government had unveiled a staggering Rs 2.11 lakh crore two-year street map to bolster NPA-hit public sector banks, which incorporates recapitalisation bonds, budgetary help and fairness dilution.
Addressing heads of state-owned banks at ‘PSB Manthan’ right here, Jaitley mentioned the federal government has determined to place in additional capital from the Funds, by way of bonds and banks’ fairness enlargement and “due to this fact, it’s the nation which is nearly going to pay to maintain the banking system in good well being”.
The finance minister assured the bankers who gathered right here that “you will not discover us interfering” in business transactions, however “when the system is making all these adjustments and all these financial contributions in an effort to strengthen the banking system, we would like sturdy public sector banking system in order that your capability to help development itself will increase”.
He additional mentioned one of many focus areas banks have taken up is to help MSMEs as a result of the sector creating jobs and giving enhance to the economic system has no entry to worldwide finance or bond market.
Jaitley informed the bankers that the federal government is spending loads of public cash and overseas funding is coming in.
“…we want the third engine additionally to fireplace and a strong non-public sector, MSME sector in order that optimum development fee which now we have the potential for may be reached,” he mentioned.
Non-performing belongings of PSBs have elevated to Rs 7.33 lakh crore as of June 2017, from Rs 2.78 lakh crore in March 2015.
Within the final three-and-a-half years, the federal government pumped in additional than Rs 51,000 crore capital in public sector banks.