The government has infused over ₹3.15 lakh crore into public sector banks (PSBs) in the last 11 years up till 2018-19, the Parliament was informed on Monday (July 8).
Replying to a question related to capital shortage in PSBs to the Lok Sabha, Minister of State for Finance Anurag Singh Thakur also said that, as per RBI guidelines, banks in India are required to maintain a minimum capital to risk-weighted assets ratio (CRAR) of 9 per cent. As on March 31, 2019, all 18 PSBs meet this minimum CRAR requirement, the minister said in a written reply.
PSBs source capital through internal capital generation, mobilisation of capital from markets, and infusion by the government. Thus, capital infusion by the government complements PSBs internal capital generation and mobilisation of capital from markets.
During the period from the FY09 to FY19, PSBs have mobilised ₹2,81,616 crore of capital through sources other than government, and have posted a net profit of ₹98,373 crore, of which a sizeable proportion has contributed to internal capital generation, Thakur said. “During the same period, the government has infused capital of ₹3,15,721 crore in PSBs,” the minister said.
In the Union Budget for the financial year 2019-20, the government has proposed to make provision for infusion of ₹70,000 crore capital to PSBs to boost credit for a “strong impetus” to the economy. The minister also said that, as per inputs received from the State Bank of India (SBI), the bank has obtained approval for raising equity capital of up to ₹20,000 crore from the market by way of qualified institutional placement (QIP) or other modes till March 2020.
SBI further said that currently, it is well capitalised, with CRAR of 12.72 per cent as on March 31, 2019, against the regulatory requirement of 11.325 per cent. It added that, depending upon the requirement, it would decide on raising capital at an appropriate time during the financial year.