The Finance Ministry is evaluating capital needs of state-owned banks, and likely to provide about Rs 30,000 crore in the upcoming Budget to help them meet minimum regulatory capital requirement in the current fiscal, sources said.
In addition, the public sector banks would also require capital for the credit growth, which has just started picking up. Five weak banks under the Prompt Corrective Action (PCA) framework of the RBI too need capital to maintain minimum regulatory capital ratios as per the Basel III norms. Besides, if the Centre goes for another consolidation like Bank of Baroda, the three-way merger would also require additional capital, the sources said. The Centre infused Rs 5,042 cr in BoB to enhance its capital base to meet additional expense due to amalgamation of Dena Bank and Vijaya Bank. In all the government made record capital infusion of Rs 1,06,000 crore in the public sector banks last fiscal. It was enhanced from earlier provision of Rs 65,000 crore in December 2018.