PSBs infused with Rs 3.19 lakh cr capital in last five years: FinMin


New Delhi, Jun 25 (IANS): Over the last five Financial Years (FYs), public sector banks (PSBs) have been infused with capital to the extent of Rs 3.19 lakh crore, with recapitalisation of Rs 2.5 lakh crore by the government and mobilisation of over Rs 66,000 crore by PSBs themselves.

To strengthen the Public Sector Banks (PSBs), over the last four financial years, the government has taken comprehensive steps under its 4R's strategy of recognising NPAs transparently, resolving and recovering value from stressed accounts through clean and effective laws and processes, re-capitalising banks, and reforming banks through the PSB Reforms Agenda, Finance Ministry informed the Lok Sabha on Monday.

"Over the last five Financial Years (FYs), PSBs have been recapitalised to the extent of Rs 3.19 lakh crore, with infusion of Rs 2.5 lakh crore by the government and mobilisation of over Rs 66,000 crore by PSBs themselves", the Ministry informed the House on Monday.

Many steps have been taken by the Government to improve the condition of banks, the Lok Sabha was informed. The key reforms were board-approved loan policies of PSBs, clearances/approvals and linkages before disbursement, scrutiny of group balance-sheet and ring-fencing of cash flows, non-fund and tail risk appraisal in project financing.

The use of third-party data sources for comprehensive due diligence across data sources has been instituted, thus mitigating risk on account of misrepresentation and fraud.

Monitoring now has been strictly segregated from sanctioning roles in high-value loans, and specialised monitoring agencies combining financial and domain knowledge have been deployed for effective monitoring of loans above Rs 250 crore.

For faster processing of loan proposals, Loan Management Systems (LMS) have been put in place for personal segment and MSME loans. To strengthen governance at the board level, the position of Chairman and Managing

Director has been bifurcated into a non-executive Chairman and MD and CEO.

The reply by finance ministry stated that positive impact on PSBs of government's 4R's approach is now visible and includes, robust recovery of Rs. 3.59 lakh crore.

Assets quality has improved as reflected in 45% year-on-year reduction in slippage into NPAs in FY 2018-19, and 63% reduction in 31 to 90 days overdue (SMA-1 & 2) corporate accounts by March 2019 from their peak in June 2017.

  

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Comment on this article

  • Sanjeev Kamath, Udupi / Seattle

    Tue, Jun 25 2019

    Congress government made it a habit to write off farmers' loans and the farmers became habitual defaulters. The Congress politicians telephoned CEOs of the Banks to grant loans to large hoax industrialists and the poor bankers had to oblige.
    Result is sucking the public money for self gains of the Congress party and politicians.
    The only option left with the BJP is to repair the damage to save depositors' intesret and safety.
    Every one was expecting the same insane comment from Mr David Pais.

    DisAgree [1] Agree [1] Reply Report Abuse

  • David Pais, Mangalore

    Tue, Jun 25 2019

    chaiwala looted da banks & v tax payers money infused X2 da banks.

    DisAgree [1] Agree [1] Reply Report Abuse

  • AM, Mangalore

    Tue, Jun 25 2019

    Whose money infused in PSB's, its common people money levying heavy taxes and please release NPA list

    DisAgree Agree [2] Reply Report Abuse


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