Recapitalization of Banks

Under the Indradhanush Plan, the Government of India proposed to make available ₹ 70,000 crores out of budgetary allocations for four years as per the figures given below:-

The Government infused a sum of ₹ 25000 crore in 19 PSBs during financial year 2015-16 and ₹ 24997.182 crore into 16 PSBs during the FY 2016-17.The capital is calculated / provided keeping in view overall macroeconomic scenario, credit estimation, Basel requirement and Reserve Bank of India recommendations, if any.

Government has also allowed all PSBs to raise capital from Public markets through Follow-on Public Offer (FPO) or Qualified Institutional Placement (QIP) by diluting Government of India holding upto 52% in phased manner based on their capital requirement, their stock performance, liquidity, market conditions etc. The Government has given permission to 13 PSBs (Allahabad Bank, Andhra Bank, Bank of India, Central Bank of India, Dena Bank, IDBI Bank, Indian Bank, Punjab National Bank, State Bank of India, Syndicate Bank, UCO Bank, United Bank of India and Vijaya Bank) to raise capital from the market through QIP / FPO / Preferential Allotment since April, 2016.

This was stated by Shri Santosh Kumar Gangwar, Minister of State for Finance in written reply to a question in Lok Sabha today.