Bank recapitalisation to start in April-May
19 Mar 2010
The government will infuse around Rs9,000 crore in fresh capital into select public sector banks in the beginning of the next fiscal, ie, 2011-12, to help PSBs achieve a minimum tier-I capital adequacy ratio of 8 per cent by March 2011.
The first phase of the bank recapitalisation programme announced in the union budget will start in April-May 2010, financial services secretary R Gopalan said.
"This will be done by April-May in the first phase. We are looking at putting in around Rs9,000 crore," Gopalan said after a meeting with Reserve Bank officials in Mumbai.
In his in the budget proposals for 2010-11, finance minister Pranab Mukherjee had proposed allocation of Rs16,500 crore to PSU banks to help them achieve a minimum Tier-I capital adequacy ratio of 9 per cent by March 2011.
Banks in India are expected to maintain a capital adequacy ratio (CAR) of 9 per cent or higher, as per the Reserve Bank of India (RBI) norms.
While Indian banks generally have a higher than prescribed CAR, the government intends all PSU banks to have a minimum CAR of 12 per cent.