Banks to get Rs 5 lakh cr leeway via recap plan

Public sector banks (PSBs) will get an additional leeway of Rs 5 lakh crore because of the government’s Rs 2.11 lakh crore recapitalisation plan coupled with the “ambitious reforms agenda”, Finance Minister Arun Jaitley said.

The finance ministry had unveiled a mega recapitalisation plan last month to improve PSBs’ financial position as most of them are plagued by mounting bad loans.

The PSBs are to raise Rs 80,000 crore by issuing bonds, which are part of the Rs 2.11 lakh crore package.

Presenting the Union Budget 2018-19, Jaitley said: “The recapitalised banks will now have a greater ability to support growth. The programme has been integrated with an ambitious reform agenda, under the rubric of an Enhanced Access and Service Excellence (EASE) programme.

“This recapitalisation will pave the way for the public sector banks to lend additional credit of Rs 5 lakh crore.”

(Agencies)

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