scorecardresearch
Bank recapitalisation: PNB, IDBI Bank, SBI received maximum funds in two years

Bank recapitalisation: PNB, IDBI Bank, SBI received maximum funds in two years

As per the government, the bank recapitalisation has improved India's global rank in getting credit from 44 in 2016 to 22 in 2018.

A total of 20 banks have received the capital infusion from the government in FY18 and FY19 so far, among which Punjab National Bank received the maximum amount of Rs 13,900 crore. IDBI Bank and the State Bank of India followed with Rs 12,471 crore and Rs 8,800 crore, respectively.

Ever since the government announced bank recapitalisation plan in October 2017, a total of Rs 1.28 lakh crore has been infused in the PSBs through infusion and mobilisation of capital from the market. As per the government, this has led to an improvement in India's global-rank for getting credit. As per the World Bank's Ease of Doing Business Index, India's 'credit' rank has also improved from 44 in 2016 to 22 in 2018 after the bank recapitalisation.

In a written reply to a question in Rajya Sabha on Tuesday, Shiv Pratap Shukla, Minister of State for Finance, said the Centre had announced recapitalisation of PSBs to the tune of Rs 2.11-lakh crore in 2017, of which Rs 88,139 crore was infused in FY18, while Rs 65,000 crore was pumped in FY19 till November.

Other banks who received capital infusion included Allahabad Bank Rs 6,444 crore; Andhra Bank Rs 3,909 crore; Bank of Baroda Rs 5,375 crore; Bank of India Rs 9,232 crore; Bank of Maharashtra Rs 3,173 crore; Bank of Maharashtra Rs 3,173 crore; Canara Bank Rs 4,865 crore; Central Bank of India Rs 7,512 crore; Corporation Bank Rs 4,742 crore; Dena Bank Rs 3,045 crore; Indian Overseas Bank Rs 6,851 crore; Oriental Bank of Commerce Rs 3,571 crore; Punjab and Sind Bank Rs 785 crore; Syndicate Bank Rs 3567 crore; UCO Bank Rs 6,507 crore; Union Bank of India Rs 4,524 crore; United Bank of India Rs 2,634 crore; and Vijaya Bank Rs 1,277 crore.

Also read: Bank recapitalisation: Five major implications of the reform package for PSBs

The government had announced the bank recapitalisation considering poor financial conditions of these PSBs due to the rising NPAs. However, later the RBI also tightened the noose around 11 of the PSBs by putting them under the Prompt Corrective Action measure, under which their lending, as well as expansion capabilities, were curtailed. The banks that were put under the PCA included Dena Bank, Allahabad Bank, United Bank of India, Corporation Bank, IDBI Bank, UCO Bank, Bank of India, Central Bank of India, Indian Overseas Bank, Oriental Bank of Commerce and Bank of Maharashtra.

Meanwhile, the government has also maintained the entire bank recapitalisation exercise has resulted in several benefits to the customers, including access to banking services from home and mobile through digital banking, and enhanced customer ease.

Also read: Bank recapitalisation to mitigate PSB risks but NPAs to impact performance, says Fitch Ratings

"During this time, as many as 33.4 crore bank accounts have been opened under Jan Dhan programme till December 5, with a balance of about Rs 84,800 crore. This also led to increased availability of loans up to Rs 10 lakh to the non-corporate, non-farm small or micro enterprises under Pradhan Mantri MUDRA Yojana," said a government statement.

Edited by Manoj Sharma