Public sector banks get Rs 22,915 crore capital infusion from government

The government has released over Rs 22,000 crore for the recapitalisation of public sector banks under the 'Indradhanush' plan and in line with the announcements made in the Union Budget.  

The government disbursed Rs 22,915 crore on Tuesday, to help them meet their capitalisation needs. 

Under the government's Indradhanush plan to revamp public sector banks, the state-run banks were promised an infusion of Rs 70,000 crore over four years to help them meet their recapitalisation needs. While Rs 25,000 crore was disbursed in the previous fiscal, after this infusion, the state banks will receive Rs 10,000 crore each in the next two years. 

The capital infusion has been extended to 13 state-run banks. 

Source: Press Information Bureau

The government was slated to release Rs 25,000 crore in this fiscal to recapitalise the public sector banks. However, out of this, 75% was given out in the first tranche, the rest will depend on the banks' performance. 

"75% of the amount collected for each bank was released now to provide liquidity support for lending operations as also to enable banks to raise funds from the market," the government said. 

"The remaining amount is linked to performance with particular reference to greater efficiency, growth of both credit and deposits and reduction in the cost of operations."