Government Unveils Reforms Map For PSU Banks, To Infuse Over Rs 88,000 Crore In Form Of Recap

The government on Wednesday announced a reforms roadmap for public sector banks and said it would infuse over Rs 88,000 crore in the form of recapitalisation this financial year, the Times of India has reported.

While Rs 80,000 crore will be infused through recapitalisation bonds, Rs 8,139 crore will come as budgetary support. This is the first part of the Rs 2.11 lakh crore recapitalisation plan announced in October 2017.

However, banks would have to accept and adopt the reforms package finalised by the Finance Ministry before they receive the recapitalisation fund, Financial Services Secretary Rajeev Kumar has said.

"Capital infusion by the government is contingent on the performance of PSBs on the reform. Whole time directors of PSBs would be assigned theme wise reforms for implementation. Their performance in this regard would be evaluated by the bank board," a finance ministry statement said.

The reform package focusses on customer responsiveness, responsible banking, credit offtake, UdyamiMitra for small and medium enterprises, deepening financial inclusion and digitalisation and developing personnel.

While IDBI Ban will receive the highest capital infusion of Rs 10,610 crore, Bank of India and State Bank of India will get Rs 9,232 crore and Rs 8,800 crore respectively. IDBI Bank has a Gross Non-Performing Assets ratio of 24.98 per cent.