Decision on Rs 8,800 cr capital infusion into PSU banks by Dec

New Delhi, Oct 10 (PTI) After approving capital infusion
of over Rs 6,000 crore into five public sector banks, the
government of India is likely to take a call by December on
the second tranche to the tune of Rs 8,800 crore for lenders.
The second tranche would come after the July-September
quarter results of the banks. The decision on capital support
to individual banks is expected by December, official sources
said.
The second quarter results would give an idea about how
many banks would require how much funds for shoring up their
Tier-I capital over 8 per cent, sources said.
The Indian government has already announced infusing Rs
15,000 crore into public sector banks during the current
fiscal. Of this, the government has already approved over Rs
6,200 crore support to five banks, including Union Bank of
India.
Finance Minister of India Pranab Mukherjee in his Budget
speech had announced that the government planned a capital
support of Rs 15,000 crore to public sector banks during the
current fiscal to ensure that these entities are able to
attain a minimum 8 per cent Tier-I capital by March 31, 2011.
The Union Cabinet has also approved the capital infusion
plan, which will help banks increase the lending capacity by
Rs 1.85 lakh crore.
This additional credit availability, as per the Cabinet
decision, is likely to benefit employment-oriented sectors,
especially agriculture, micro and small enterprises and
entrepreneurs.
Earlier this month, the government approved infusion of
Rs 6,211 crore into five public sector banks, a move which
will help in lending an additional Rs 77,637 crore to various
sectors of the economy.
The banks, which got capital support from the government
included Union Bank of India, Bank of Maharashtra, IDBI Bank,
UCO Bank and Central Bank India. PTI DP
MHM