8 PSU banks to raise capital from market by March
Some banks have already got approval from the finance ministry while others are in the process of getting the green signal for raising capital either through private placement or the rights issue, they said.
As many as eight public sector banks (PSBs) have decided to raise capital from the market within four months as part of the Rs 2.11 lakh crore recapitalisation plan, according to official sources.
Some banks have already got approval from the finance ministry while others are in the process of getting the green signal for raising capital either through private placement or the rights issue, they said.
Most banks are preferring the Qualified Institutional Placement (QIP) route, sources said, adding that Punjab National Bank (PNB) would be the first to hit the market to raise Rs 5,000 crore.
Bank of Baroda, Bank of India, Union Bank of India Allahabad Bank and Andhra Bank are also gearing up for the share sale, they said.
Finance Minister Arun Jaitley in October had announced an unprecedented Rs 2.11 lakh crore two-year road map to strengthen PSBs, reeling under high non performing assets (NPAs) or bad loans. Their NPAs have increased to Rs 7.33 lakh crore as of June 2017, from Rs 2.75 lakh crore in March 2015.
The plan includes floating re-capitalisation bonds of Rs 1.35 lakh crore and raising Rs 58,000 crore from the market by diluting government?s stake.
The government equity, as per the current policy, can come down to 52 per cent in state-owned banks.
Jaitley had also announced that banks would get about Rs 18,000 crore under the Indradhanush plan over the next two years.
Under the Indradhanush road map announced in 2015, the government had announced infusion of Rs 70,000 crore in state- owned banks over four years while they will have to raise a further Rs 1.1 lakh crore from the market to meet their capital requirement in line with global risk norms, known as Basel-III.
In the last three-and-a-half years, the government pumped in Rs 51,858 crore capital in the PSBs. The remaining Rs 18,142 crore will be injected into the banks over the next two years.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.
RECOMMENDED STORIES
Retirement Planning: SIP+SWP combination; Rs 15,000 monthly SIP for 25 years and then Rs 1,52,000 monthly income for 30 years
Top Gold ETF vs Top Large Cap Mutual Fund 10-year Return Calculator: Which has given higher return on Rs 11 lakh investment; see calculations
Retirement Calculator: 40 years of age, Rs 50,000 monthly expenses; what should be retirement corpus and monthly investment
SBI 444-day FD vs Union Bank of India 333-day FD: Know maturity amount on Rs 4 lakh and Rs 8 lakh investments for general and senior citizens
EPF vs SIP vs PPF Calculator: Rs 12,000 monthly investment for 30 years; which can create highest retirement corpus
Home loan EMI vs Mutual Fund SIP Calculator: Rs 70 lakh home loan EMI for 20 years or SIP equal to EMI for 10 years; which can be easier route to buy home; know maths
06:48 PM IST