Govt to infuse Rs12,535-cr capital in 4 PSU banks
20 Feb 2019
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The finance ministry today announced plans to inject Rs12,535 crore in four state-run banks - Central Bank of India, United Bank, UCO Bank and Indian Overseas Bank – that are currently placed under the Reserve Bank’s prompt corrective action framework.
The government had, in December, infused Rs28,615 crore into seven other public sector banks (PSBs) through recapitalisation bonds. The latest fund infusion would take total recapitalistion spending of the central government on 12 PSU banks to Rs48,239 crore.
The recapitalisation funds will help the state-run banks to maintain regulatory capital requirements and finance growth plans.
Financial services secretary Rajiv Kumar said the government will infuse Rs9,086 crore in Corporation Bank and Rs6,896 crore in Allahabad Bank - the two "better-performing" banks currently under the PCA supervision of the RBI.
Further, Rs4,638 crore and Rs205 crore will be provided to Bank of India and Bank of Maharashtra. These banks have recently come out of the regulatory supervisory framework PCA of the RBI.
Kumar further said Punjab National Bank will get Rs5,908 crore, Union Bank of India Rs4,112 crore, Andhra Bank Rs3,256 crore and Syndicate Bank Rs1,603 crore.
Meanwhile, the union cabinet chaired by Prime Minister Narendra Modi on Tuesday approved the Promulgation of Unregulated Deposit Schemes Ordinance, 2019.
The proposed ordinance will tackle the menace of illicit deposit taking activities in the country by rapacious operators, which at present are exploiting regulatory gaps and lack of strict administrative measures to dupe poor and gullible people of their hard-earned savings. The ordinance once passed will immediately ban unregulated deposit taking schemes. It has adequate provisions for punishment and disgorgement / repayment of deposits in cases where such schemes nonetheless manage to raise deposits illegally.
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