Lok Sabha Question No. 2976 (UNSTARRED), answered on 2016-12-02
Subject: Recapitalisation of Banks
Ministry: FINANCE
Asked by: RANGASWAMY DHRUVANARAYANA, R. VANAROJA, G. HARI

## GOVERNMENT OF INDIA

## DEPARTMENT OF FINANCIAL SERVICES

## LOK SABHA UNSTARRED QUESTION NO.2976

TO BE ANSWERED ON THE December; 2016/ Agrahayana 11, 1938 (SAKA) 2nd

## Recapitalisation of Banks QUESTION

2976. SHRI R DHRUVA NARAYANA: SHRIMATI VANAROJA R: SHRI G\_ HARI:

Will the Minister of FINANCE be pleased to state:

- (a) whether the Government proposes to recapitalise Public   Sector Banks (PSBs) , if so, the details thereof and the funds allocated to PSBs thereof, bank-wise;
- (b) whether the infusion of such capital is sufficient enough to aid the PSBs to recover their huge financial losses and improve their lending capacities and if the details of the losses recovered by PSBs thereof; bank-wise; SO,
- (c) whether the proposal for revamp of PSBs under Indradhanush scheme has been implemented if the details thereof; and SO,
- (d) the steps taken by the Government to improve the bank's lending capacities, enhance their asset quality and help them to tackle the problem of increasing NPAs?

## ANSWER

The Minister of State in the Ministry of Finance (SHRI SANTOSH KUMAR GANGWAR)

(a) to (c): Under the Indradhanush Plan, the Government of India proposes to make available Rs.70,000 crores out of budgetary allocations for four years as per the figures given below:

|      | Financial Year 2015 16   | Rs. 25,000 crore   |
|------|--------------------------|--------------------|
|      | Financial Year 2016-17   | Rs. 25,000 crore   |
|      | Financial Year 2017-18   | Rs 10,000 crore    |
| (iv) | Financial Year 2018-19   | Rs. 10,000 crore   |
|      | Total                    | Rs. 70,000 crore   |

The Government has already infused a sum of Rs. 25000 crore in 19 PSBs during financial year 2015-16 and a budgetary provision of Rs. 25000 crore has been made for the year 2016-17\_ Government has already allocated Rs. 22915 Crore to 13 PSBs on 19.07.2016 The details of capital infused in the PSBs and the capital to be infused based on performance is given below upfront

| Name of the PSB       |   Capital infused upfront In Rs crores) |   Performance Based Capital |
|-----------------------|-----------------------------------------|-----------------------------|
| Allahabad Bank        |                                      33 |                          11 |
| Bank of India         |                                    1338 |                         446 |
| Canara Bank           |                                     748 |                         249 |
| Central Bank of India |                                    1297 |                         432 |
| Corporation Bank      |                                     508 |                         169 |
| Dena Bank             |                                     446 |                         148 |
| Indian Overseas Bank  |                                    1551 |                        1550 |
| Punjab National Bank  |                                    2112 |                         704 |
| Syndicate Bank        |                                     776 |                         258 |
| UCO Bank              |                                     775 |                         258 |
| Union Bank of India   |                                     541 |                         180 |
| United Bank of India  |                                     608 |                         202 |
| State Bank of India   |                                    5681 |                        1894 |
| TOTAL                 |                                   16414 |                        6501 |

Government has also allowed all PSBs to raise 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. capital

Under the Indradhanush Plan action related to Appointment (ii) Bank Board Bureau (iii) Capitalization (iv) De-stressing PSBs Empowerment (vi) Framework of Accountability (vii) Governance Reforms has been initiated by the Government:

- (d): The Government has taken sector specific measures (Infrastructure, Power; Road Textiles, Steel etc ) where incidence of NPA is high: The Insolvency and Bankruptcy Code (IBC) has been enacted and Securitization and Reconstruction of Financial Assets and Enforcement of   Security Interest Act (SARFAESI) and the Recovery of Debts due to Banks and Financial Institutions (RDDBFI) Act have been amended to improve resolution recovery of bank loans: Six new Debt Recovery Tribunals (DRTs) have been established for improving recovery: RBI has provided a number of tools in this regard Corporate Debt Restructuring (CDR), Formation of Joint Lenders Forum (JLF), Flexible   Structuring for term   project loans to Infrastructure and Core Industries   (5/25 Scheme) , Strategic Debt  Restructuring Scheme (SDR) and Sustainable Structuring of Stressed Assets (S4A): long