Govt to infuse Rs 70,000 cr in PSU banks in 4 yrs: Jaitley

Government proposes to infuse Rs 70,000 crore in public sector banks in four years from budgetary allocations, Finance Minister Arun Jaitley said today.

"If the internal profit generation is excluded, which is going to be available to public sector banks (based on the estimate of average profit of the last three years), the capital requirement of extra capital for the next four years up to FY 2019 is likely to be about Rs 1.80 lakh crore," he said in a written reply in the Rajya Sabha.

The estimate is based on credit growth rate of 12 per cent for the current year and 12 to 15 per cent for the next three years depending on the size of the bank and their growth ability, he said.

"Out of the total requirement, the Government of India proposes to make available Rs 70,000 crore out of the budgetary allocations during FY 2016 to FY 2019," he said.

The government proposes to allocate Rs 25,000 crore in 2015-16 out of which 40 per cent of the amount will be given to those banks that require support to maintain their common equity at 7.5 per cent, he said.

He further said that 40 per cent capital will be allocated to the top six big banks namely SBI, BoB, PNB, Canara Bank and IDBI Bank in order to strengthen them to play a vital role in the economy.

The remaining portion of 20 per cent will be allocated to the banks based on their performance during the three quarters in the current year judged on the basis of certain parameters, he said.

In reply to another question, Minister of State for Finance Jayant Sinha said the government has advised public sector banks (PSBs) to review their investment in different non-core banking activities and take suitable decision with regard to investment and disinvestment in existing as well as proposed non-core banking activities.

"These decisions should be made by board of the PSBs as per corporate governance guidelines laid out in the Companies Act," he said.

Replying to another question, Sinha said as of July 3, 47.73 lakh accounts were eligible for the overdraft facility of up to Rs 5,000 under the Pradhan Mantri Jan Dhan Yojana.

As many as 0.70 lakh accounts have availed this facility if overdraft for aggregate amount of Rs 14.35 crore, he said.