Public Sector Banks (PSBs) may raise capital themselves to meet regulatory and growth capital needs because there is unlikely to be any fresh bank recapitalisation till the next government takes over in June, official sources said on Friday.
The government has not provided money towards banks’ capital infusion in the 2019-20 interim Budget. The sources said banks might need funds to support credit growth and they may have to raise capital from the market or wait for the full Budget in July. In February, the government approved Rs 48,239 crore recapitalisation bonds for 12 PSBs.
Allahabad Bank is looking to raise around Rs 500-600 cr capital in the next fiscal through dilution in stake of its JV insurance firm and also by selling non-core assets, an official said. This comes close on the heels of its coming out from the prompt corrective action (PCA) framework of the Reserve Bank of India. “We are looking to raise capital around Rs 500-600 crore in the next fiscal through dilution in stake of our JV,” the bank’s MD and CEO SS Mallikarjuna Rao told reporters here.