The Finance Ministry reiterated on Wednesday that more capital support will be given to public sector banks, which need an additional ₹2.40 lakh crore in the next three years to meet Basel III capital adequacy norms.

“We are working and trying to understand exactly what the capital requirements are going to be in the next two-three years for (public sector) banks. And we are there to support them and provide them the capital they need,” Minister of State for Finance Jayant Sinha said here at an event.

Sinha, along with Financial Services Secretary Hasmukh Adhia, has already held four rounds of meetings to assess the capital requirements of banks. Another round will take place in Bengaluru when Andhra Bank, Indian Overseas Bank, Corporation Bank, Canara Bank, Syndicate Bank and Vijaya Bank will make their presentations.

The Minister also indicated a comprehensive package to strengthen public sector banks, which would cover five aspects and dimensions, such as bringing changes in governance and management of public sector banks, introducing a transparent selection process for heads of banks, working on improving operating performance and providing capital.

For the current fiscal, the government has allocated ₹7,940 crore in the Budget for capital infusion in banks. However, last month the Finance Minister promised to provide more than the Budgeted amount this fiscal.

comment COMMENT NOW