The Finance Ministry Nirmala Sitharaman will take a call on residual Rs 14,500 crore capital infusion in the public sector banks (PSBs) in the fourth quarter of this fiscal, as per the sources. Following the financial performance review after the first half, sources said, it was found that Punjab & Sind Bank, out of the 12 PSBs, was in need of Rs 5,500 crore to meet the regulatory requirement.
Therefore, the government approved capital infusion through preferential allotment of equity shares in Punjab & Sind Bank last month. The fund was approved from Rs 20,000 crore cleared by Parliament in September for capital infusion of PSBs as part of the first batch of Supplementary Demands for Grants for 2020-21. With Rs 5,500 crore going to Punjab & Sind Bank, the government is left with Rs 14,500 crore.
When the performance review post third quarter numbers takes place, sources said, by that time banks would have clear idea about additional burden on them due to one-time restructuring being undertaken as per the RBI guidelines to help the industry tide over the risk of default due to subdued business environment in the COVID-19 crisis.