December 15, 2025 05:30 am (IST)
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Government allocates funds for Public Sector Banks' capitalisation needs in 2016-17
New Delhi, Jul 19 (IBNS): The Union Ministry of Finance announced on Tuesday that in line with the announcements made under 'Indradhanush' and the Union Budget, the central Government has undertaken an exercise to assess the capitalisation needs of Public Sector Banks during the year 2016-17.
The capital infusion exercise for the current year is based on an assessment of need as assessed from the CAGR of credit growth for the last five years, banks’ own projections of credit growth and an objective assessment of the potential for growth of each Public Sector Bank.
Consequent upon the above exercise, 75% of the amount collected for each bank is being released now to provide liquidity support for lending operations as also to enable banks to raise funds from the market, the ministry said. The remaining amount, to be released later, is linked to performance, with particular reference to greater efficiency, growth of both credit and deposits and reduction in the cost of operations. Total Rs.22, 915 crore is being allocated to select banks.
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