Centre injects Rs.22,915 cr into 13 public sector banks
In a bid to boost credit growth in the
economy, the Centre has announced a sum of Rs.22,915 crore for recapitalisation
of 13 public sector banks. State Bank of India (SBI) will receive the largest
allocation of Rs.7,575 crore. Indian Overseas Bank and Punjab National Bank are
to get Rs.3,191 crore and Rs.2,816 crore respectively.
The infusions required in the current
year were assessed from the CAGR of credit growth for the last five years and
the banks’ projections of credit growth. The potential for growth of each these
banks was also factored in.
Flashback:
In the Union Budget, the Centre had
allocated a total of Rs.25,000 crore for the capitalisation of public sector
banks in the current financial year 2016-17, in line with the infusion plans
announced under the umbrella scheme “Indradhanush” introduced last year. The
plan proposes infusions adding up to Rs.25,000 crore in 2015-16 as well as in
2016-17, followed by Rs.10,000 crore each in 2017-18 and 2018-19.
Mission Indradhanush:
·
Mission Indradhanush aimed to revamp the functioning
of public sector banks so that PSBs can compete with the Private Sector Banks.
·
The mission is a brainchild of PJ Nayak committee.
·
It is launched by Ministry of Finance under the
Department of Financial Services.
·
The mission is regarded as one of the big steps after
the nationalisation of banks in 1970s.
·
The mission includes the seven key reforms of
appointments, board of bureau, capitalisation, de-stressing, empowerment,
framework of accountability and governance reforms.
