FM Announces Recapitalization of PSU Banks with Rs.2.11 Lakh Crores in Current Financial Year

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  • Union Finance Minister Mr. Arun Jaitley announced a recapitalization of Rs.2.11 lakh crores to Public Sector Banks.
  • The move to recapitalize the PSU Banks was announced to check NPA for the ailing Banks.
  • 1.35 lakh crores shall be provided in the shape of recapitalization bonds and the balance by way of budgetary support from the central government as well as sale of shares by the Banks themselves.
  • This is one of the biggest recapitalization programme announced by the government of India.
  • Earlier in 1990s government had issued recapitalization bonds to the Banks.
  • By issuing such recapitalization bonds, government is planning to defer its own repayment obligations.
  • This move may not put any extraordinary pressure on the budgetary support of the Union Government.
  • This is considered as a courageous and tricky move by the industry sources.

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