Finance Ministry likely to stick to capital infusion programme for PSU banks

The Finance Ministry would not curtail its capital infusion plan for this financial year even as state-owned banks would be needing fewer funds following the RBI’s decision to defer the deadline to meet Basel III norms by a year, according to sources. Under the new dispensation, the capital infusion by the government in public sector banks for meeting the capital buffer norms would come down to around Rs 15,000-20,000 crore, sources said. However, there will not be any reduction in the capital funding plan as announced in October last year despite a lower requirement due to the extension of the deadline for meeting the CCB of 2.5 per cent until March 2020, sources said. The capital infusion would help improve the financial health of banks sources said, adding that some banks would get necessary regulatory capital while others would get it for fueling growth, they clarified.

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