Sinha: Govt to provide more capital to PSU banks, if needed

Friday, Mar 4, 2016,15:25 IST By Metrovaartha A A A

Gurgaon | The government today said it has a very good sense of the problem of bad loans in banking sector and will continue to provide funds to strengthen state-owned banks. We have now a very good sense of stressed assets.

We believe that the stressed assets are about Rs 8 lakh crores of the total advances that public and private sector banks, Finance Jayant Sinha said here at the second Gyan Sangam. The government has provided Rs 25,000 crore in the Budget 2016, he said, adding, we will provide more as necessary to ensure that our banks are well capitalised. We have about about 11.25 per cent of the numbers of stressed assets in the system right now. The good news in all of this is two-fold that – the set of stressed assets are stabilised, we know where they are and we know how to deal with them, he added.

In addition, he said, the RBI has also made certain changes to the manner in which capital can be recognised as part of the tier-I capital and that has added further strength to bank balance sheet. As far as the set of stressed assets and the NPA situation are concerned, Sinha said: We think we now have a very good control over them, and of course are working very closely with the RBI. We will continue to work with those numbers to see how we can further expedite and strengthen the recovery process for these stressed assets.

Government has plans to infuse Rs 70,000 crore in PSBs over four years ending March 2019. Of this, Rs 25,000 crore each would come in 2015-16 and 2016-17. Infusion of Rs 10,000 crore for each of 2017-18 and 2018-19 fiscals. The capital infusion roadmap indicates that the overall capital requirements of the banks over the four-year period would total Rs 1.85 lakh crore.