Government Infuses Rs 6,690 Crore in 9 PSU Banks in FY15

New Delhi: The government has pumped in Rs 6,690 crore in nine public sector banks including State Bank of India (SBI), Punjab National Bank (PNB), Bank of Baroda, Canara Bank and Syndicate Bank for fiscal year 2014-15, to strengthen their capital base.

The other banks are Allahabad Bank, Indian Bank, Dena Bank and Andhra Bank.

Earlier in February, government had decided to infuse capital in these banks based on their performance efficiency.

The government has infused capital of Rs 1,260 crore in Bank of Baroda, Rs 870 crore in Punjab National Bank, Rs 570 crore in Canara Bank, Rs 460 crore in Syndicate Bank and Rs 140 crore in Dena Bank, the banks said in separate filings to the BSE on Wednesday.

SBI, the country's largest public sector lender, has been provided with the maximum capital infusion of Rs 2,970 crore, followed by Allahabad Bank (Rs 320 crore), Indian Bank (Rs 280 crore), and Andhra Bank (Rs 120 crore).

Bank of Baroda said in its filing said it has informed BSE that on receipt of the funds from the government, it has on March 31, 2015 issued and allotted 6,44,20,471 equity shares of Rs 2 each fully paid up at an issue price of Rs 195.59 per equity share amounting to over Rs 1,259 crore to government on preferential basis.

PNB said capital funds to the tune of Rs 870 crore have been received from the government on March 31, 2015 for issue and allotment of 4,42,07,317 equity shares of face value of Rs 2 each at a price of Rs 196.80 per equity share on preferential basis.

Banks, which are more efficient, would be rewarded with extra capital for their equity so that they can further strengthen their position, government had said earlier.

In his Budget speech last July, Finance Minister Arun Jaitley had said that to be in line with Basel-III norms there was a need to infuse Rs 2.4 lakh crore as equity by 2018 in public sector banks.

Government infused capital of Rs 12,000 crore in 2011-12, Rs 12,517 crore in 2012-13 and Rs 14,000 crore in 2013-14. Owing to higher provisioning on account of rising non-performing assets (NPA), banks are finding it tough to plough back more of its retained earnings as capital than what they did in the previous years.

The S&P BSE bankex index on Wednesday closed at 21,360.45 points, up 2.37 per cent from the previous close.