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The Finance Ministry is likely to finalise by this weekend the bank-wise allocation of the Rs 15,888-crore capitalisation support provided for in Budget 2012-13.
“We will finalise it (bank-wise allocation) by the end of this week. We would like to do recapitalisation at one go,” D. K. Mittal, Secretary, Department of Financial Services, told newspersons on the sidelines of Economic Editors’ conference here.
The capitalisation support is part of the Government’s commitment to help public sector lenders in their transition to Basel-III capital adequacy norms.
This year’s Budget had provided for capitalisation support to banks, regional rural banks and other financial institutions, including Nabard.
During 2011-12, the Centre had made a capital infusion of Rs 12,000 crore in seven public sector banks.
This was done to maintain the minimum 8 per cent tier–I capital so that these banks meet the credit requirements of the economy.
On new bank licences, Mittal indicated that the Government and the Reserve Bank of India would soon decide on whether to go ahead on this matter or wait until the Banking Laws (Amendment) Bill is passed by Parliament.
The mechanism to be adopted will soon be finalised, he noted.
Finance Minister P. Chidambaram told the Economic Editors’ conference that there was no proposal to hike foreign investment limits in banks.
For private sector banks, the composite foreign investment limit is currently pegged at 74 per cent.
For public sector banks, it is pegged at 20 per cent.
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