Categories: Business

Finance minister may review capital requirement of PSU Banks after Q2

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Finance Ministry

new Delhi. The Finance Ministry may assess the capital requirement of public sector banks after the September quarter, as the data on NPA will become clear by that time. The sources have given this information. The economy has slowed down due to the Corona virus epidemic and the lockdown imposed for its prevention. For this reason, there are speculations that there may be an increase in non-performing assets (NPAs). In the event of this happening, banks will have to increase the provision for NPAs under the guidelines of the Reserve Bank. Sources say that if the RBI accepts the request to restructure the loans for the areas affected by the corona virus epidemic, then banks can get relief. He said that the period of relief from repayment of loan installments expires in August. Only then can the situation regarding NPA become clear. In such a situation, once the figures for the second quarter are clear, it would be appropriate to review the capital requirement only.

Uday Kotak, president of banking sector business and industry organization CII, says that to support the economy, public sector banks will need financial help from the government. He said that private sector banks will need to raise capital from various sources to meet the challenges ahead. He said last month that the banking sector needs immediate recapitalization of three to four lakh crore rupees to meet its credit requirements. It is noteworthy that in the banking sector NPAs are projected to grow by 4.5 percent in the financial year 2020-21. The government had proposed to infuse 70 thousand crore rupees in public sector banks in the financial year 2019-20. The government has pumped Rs 65,443 crore out of this through various measures in public banks in the last financial year.

This post was published on July 5, 2020 6:19 pm

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