PSUs will require Rs 99000 crore capital infusion in four years: Nomura

Earlier this week, Finance Ministry infused Rs 22,915 crore in to 13 public sector banks in an effort to meet their recapitalisation needs.

ZeeBiz had earlier reported, that the Government said, "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.”

But, looking at the bad loans pile, researchers feel that the capital needs are higher than the budgeted amount.

In a note by Nomura, Adarsh Parasrampuria said that as per his estimation, PSU banks will require $15 billion (Rs 99791.25 crore) of infusion by FY19.

"Of the planned Rs 700 billion of infusion, FY16 saw infusion of Rs 250 billion, with Rs 450 billion left for FY16-FY19. This is just under 50% of the requirement for PSU banks", Parasrampuria said.

Apart from Nomura, according to PTI, Moody's Investors Service, had also said that 11-rated PSU banks need Rs 1.2 lakh crore capital to shore up their balance sheets, which far exceeds the Rs 45,000-crore budgeted for disbursal to the banks by March 2019.

According to the report, last year the government had said announced infusion of Rs 70,000 crore in PSBs over four years while they have to raise a further Rs 1.1 lakh crore from the markets. 

Out of Rs 22,915 crore infused, the government allocated Rs 7575 crore to State Bank of India, Rs 3101 crore to Indian Overseas Bank and Rs 2816 crore to Punjab National Bank.