Government to pump in Rs 16500 Crores to PSU Banks

Shri Pranab Mukherjee, Union Finance Minister, while presenting the Union Budget in the Lok Sabha today, said that an Apex level Financial Stability and Development Council is proposed to be set up with a view to strengthen and institutionalize the mechanism for maintaining financial stability.

This Council would monitor macro prudential supervision of the economy, including the functioning of large financial conglomerates, and address inter-regulatory coordination issues. It will also focus on financial literacy and financial inclusion.

During 2008-09, the government had infused Rs.1900 crore as Tier-I capital in four public sector banks to maintain a comfortable level of capital to Risk Weighted Asset Ratio. An additional sum of Rs.1200 crore is being infused now. For the year 2010-11, it is proposed to provide a sum of Rs.16,500 crore to ensure that the public sector banks are able to attain a minimum 8 per cent Tier-I capital by March 31, 2011.

Source : Equity Bulls

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