It will be easy to get loans due to banks having capital, know what is the government's plan

It will be easy to get loans due to banks having capital, know what is the government’s plan

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new Delhi. In the second week of March, the government can invest Rs 15,000 crore in public sector banks (PSBs). To help the lending banks to meet the capital-reserve requirements. Punjab and Sind Bank and Central Bank of India are the only lender banks that still have restrictions. These banks will benefit the most from this step of the government.

This year, the government has earmarked Rs 15,000 crore for recapitalization of public sector banks during the current financial year in the revised budget estimates. The entire amount which can be distributed next month. The government had initially budgeted Rs 20,000 crore for bank recapitalization, but reduced the bad loans of banks to Rs 15,000 crore in view of their improving financial condition.

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Adequate capital support from the government has helped the banks to undertake financial reforms. To augment their resources, banks will be encouraged to raise funds from the market and sell their non-core assets, sources said. Indian Overseas Bank is also expected to get capital from the Finance Ministry. The additional capital is expected to improve their financial position and help the government get better valuations. Let us inform that in the current financial year, all 12 public sector banks have made profits.

In the last financial year, the government had invested Rs 20,000 crore in five PSBs. Of this, ₹11,500 crore was given under PCA to three banks – UCO Bank, Indian Overseas Bank and Central Bank of India. A major part of the government funding has been through recapitalization bonds.

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Talking about the financial health of banks, the net profit of public sector banks increased to Rs 14,012 crore in the first quarter of the financial year, which later increased to Rs 17,132 crore during the quarter ended September, 2021. During the last financial year, a total of Rs 58,697 crore was raised by public sector banks, which was the highest in a single financial year. At the same time, the capital adequacy ratio (CAR) of these banks increased to 14.3 percent at the end of June, 2021, while their provision coverage ratio reached an eight-year high with 84 percent.

Tags: bank news, business news, Business news in hindi, central government

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