Union Finance Ministry Announced to Infuse 14000 Crore Equity in Banks

The Finance Ministry on 23 October 2013 announced that it would infuse 14000 crore Rupees capital in 20 public sector banks during the current financial year, i.e. 2013-14.

The government had infused 12517 crore in 13 public sector banks in the financial year that ended in March 2013.

Beyond the capital support from the government, public sector banks have the headroom to raise 10000 crore from the market though rights issue, qualified institutional placement (QIP) or follow-on public offer (FPO) without diluting the existing government stake.

The  largest lender of country State Bank of India will get 2000 crore equity capital from the government. The Central Bank of India and IDBI Bank will get 1800 crore each.

The government will provide 1200 crore equity capital to Indian Overseas Bank, and Bank of India will get 1000 crore.

Punjab National Bank and Union Bank of India will get 500 crore each. United Bank of India will get 700 crore, Vijaya Bank 250 crore, and Syndicate and UCO Bank will get 200 crore each.

Other lenders that will be benefited from the government's equity infusion programme include Allahabad Bank 400 crore; Andhra Bank 200 crore; Bank of Baroda 550 crore; Bank of Maharashtra 800 crore; Canara Bank 500 crore; Corporation Bank 450 crore; and Dena Bank700 crore.

Objective of Capital Infusion

The capital infusion had been done with the twin objective of adequately meeting the credit requirement of the productive sectors as well as to maintain regulatory capital adequacy ratios in public sector banks (PSBs).

The government of India, as the majority shareholder, is committed to keep all PSBs adequately capitalized.