Lok Sabha Question No. 5652 (UNSTARRED), answered on 2017-04-07
Subject: Capital Infusion in Banks
Ministry: FINANCE
Asked by: G. HARI, KIRIT PREMJIBHAI SOLANKI

## 5652.  SHRI G. HARI:

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF FINANCIAL SERVICES

## LOK SABHA

## UNSTARRED QUESTION NO.5652

TO BE ANSWERED ON THE 7 th  April 2017/ Chaitra 17, 1939 (SAKA)

## Capital Infusion in Banks

DR. KIRIT P. SOLANKI:

Will the Minister of FINANCE be pleased to state:

- (a) whether the Government has approved the second tranche of capital infusion in Public Sector Banks (PSBs) to enhance their capital base and if so, the details thereof;
- (b) whether the PSBs have demanded more capital infusion in view of the capital constraints the PSBs are facing and if so, the details thereof and the action taken by the Government thereon;
- (c) 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 so, the details of the losses recovered by each bank thereof, bank-wise; and
- (d) whether the Government has taken any other steps to improve the bank's lending capacities, enhance their asset quality and help them tackle the problem of increasing NPAs and if so, the details thereof?

## ANSWER

The Minister of State in the Ministry of Finance

## (SHRI SANTOSH KUMAR GANGWAR)

(a) to (d): The Government infused a sum of Rs. 25000 crore in 19 PSBs during financial year 2015-16 and Rs. 24997.182 crore into 16  PSBs  during  the  FY  2016-17.The  capital  is    calculated/  provided  keeping  in  view  overall  macroeconomic  scenario  ,  credit estimation, basel requirement and Reserve Bank of India recommendations if any.  The Bank-wise details of capital infused into 16 PSBs during FY 2016-17 by Government of India are as under:

Rs. In Crore.

| S.No.   | Name of the PSBs      |   Total allocation |
|---------|-----------------------|--------------------|
| 1       | Allahabad Bank        |            451     |
| 2       | Andhra bank           |           1100     |
| 3       | Bank of India         |           2838     |
| 4       | Bank of Maharashtra   |            300     |
| 5       | Canara Bank           |            745.182 |
| 6       | Central Bank of India |           1397     |
| 7       | Corporation Bank.     |            508     |
| 8       | Dena Bank             |           1046     |
| 9       | Indian Overseas Bank  |           2651     |
| 10      | Punjab National Bank  |           2112     |
| 11      | Syndicate Bank        |            776     |
| 12      | UCO Bank              |           1925     |
| 13      | Union Bank of India   |            541     |
| 14      | United Bank of India  |           1026     |
| 15      | State Bank of India   |           5681     |
| 16      | IDBI                  |           1900     |
|         | Total                 |          24997.2   |

Government  has  also  allowed  all  PSBs  to  raise  capital  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.

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 long term project loans to Infrastructure and Core Industries (5/25 Scheme), Strategic Debt Restructuring Scheme (SDR) and Sustainable Structuring of Stressed Assets (S4A).

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