ParliamentApproval of the infusion of Rs 20 billion in public sector banks in the current financial year to meet regulatory requirements.
This is part of the first batch of Supplemental Grant Lawsuits for 2020-21 filed by Finance Minister Nirmala Sitharaman at Lok Sabha.
In total, the government has sought
ParliamentThe nod to an additional expense of Rs 2.35 lakh crore, which includes a cash outflow of Rs 1.66 lakh crore, mainly to cover the expenses of fighting the COVID-19 pandemic.
“To cover the costs of recapitalizing public sector banks by issuing government securities,” the government has requested
Parliamentauthorization of Rs 20,000 crore, according to a document.
In 2019-20, the government proposed to make a capital infusion of Rs 70 billion into public sector banks (PSBs) to boost credit for a strong boost to the economy.
However, the government refrained from committing capital in the 2020-21 Budget for PSBs, expecting lenders to raise funds from the market depending on requirements.
In the last financial year, Punjab National Bank earned Rs 16,091 million, Union Bank of India received Rs 11,768 million, while Canara Bank and Indian Bank earned Rs 6,571 million and Rs 2,534 million respectively.
Allahabad Bank received 2,153 million rupees, United Bank of India received 1,666 million rupees and Andhra Bank received 200 million rupees. These three lenders have merged with several PSBs.
Furthermore, Bank of Baroda got a capital injection of Rs 7,000 crore, Indian Overseas Bank received Rs 4,360 crore and UCO Bank got Rs 2,142 crore. Punjab & Sind Bank received Rs 787 crore and the Central Bank of India received Rs 3,353 crore.
In addition, IDBI Bank, controlled by LIC, received additional capital of Rs 4,557 crore through supplemental grant applications.
The government has also applied for Rs 1,232 crore as a grant from the Small Industries Development Bank of India (SIDBI) in a 2 percent interest grant on the early repayment of Shishu loans made under Pradhan Mantri Mudra Yojana (PMMY).
In addition, Sitharaman has sought approval from
Parliament Rs 4,000 crore to cover an additional expense of general grants to the National Credit Guarantee Trustee Company Limited (NCGTC) for the Emergency Guarantee Line of Credit (GECL) for eligible MSME borrowers.
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