These bonds will not have Statutory Liquidity Ratio (SLR) and have tenure of 10-15 years, Economic Affairs Secretary S C Garg told reporters here.
SLR is a portion of deposits that banks need to invest in government securities. Asked about the pricing, Garg said it would be three months average price of government securities plus the spread.
"There is no fiscal impact of bond issuance to banks.These will be swap deals and cash neutral. There is not going to be a public issue," he said.
The government has pegged the fiscal deficit target at 3.2 per cent of the GDP for the current fiscal.
The additional expenditure of Rs 80,000 crore towards bank recapitalisation through issue of government securities will be matched by additional receipts on issues of securities to the banks and "will not entail any cash outgo".
Earlier this month, the Lok Sabha gave its approval for Rs 80,000 crore recapitalisation bonds for strengthening PSBs. Jaitley in October had announced an unprecedented Rs 2.11 lakh crore, 2-year road map to strengthen PSBs, reeling under high non performing assets (NPAs) or bad loans. Their NPAs have increased to Rs 7.33 lakh crore as of June 2017, from Rs 2.75 lakh crore in March 2015.
The plan included floating re-capitalisation bonds of Rs 1.35 lakh crore and raising Rs 58,000 crore from the market by diluting government's stake. He had also announced that there would be front loading of recapitalisation bonds
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