FM Arun Jaitley finds merit in PSU bank’s demand, more fund for capital infusion!

In what could be a huge relief to the public sector banks, Finance Minister Arun Jaitley has promised more capital infusion into the banks. According to an ET report, FM Jaitley has found ‘merit’ in their demand for more funds.

"Banks have made a strong case for additional capital... And over the next few months, this is something the government is going to seriously look at," Jaitley said after meeting heads heads of PSU banks in the report. He added, "...I do believe it's a case which has merit (attention)."

It should be noted that the government has earmarked Rs 7,940 crore in the Budget 2015 for the purpose of recapitalisation of PSU banks. Interestingly, FM Jaitley made the statement after RBI Deputy Governor S S Mundra had yesterday pointed out that the Budget amount marked for recapitalisation of PSU banks is not adequate and had asked the Finance Ministry to raise the quantum of assistance in view of mounting bad loans and support growth.

In the FY15, the government injected Rs 6,990 crore in nine public sector banks based on their performance.