New Delhi: The government may set aside about ₹25,000 crore in the FY22 budget for providing capital to state-run banks, people aware of deliberations told ET. The finance ministry has sought details from lenders on capital requirements, estimated bad loans and plans to raise funds. The final capitalisation amount will be decided after these discussions.
“While various proposals including a bad bank are being discussed, an assessment is being done on the capital requirements for banks,” a government official said. “These are some projections which may vary depending on various factors such as the banks’ plan to raise capital, and spike in bad loans.”
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AAA The Enforcement Directorate on Tuesday said it has arrested an absconder who was wanted in alleged bank frauds worth about ₹100 crore under money laundering charges from the Ahmedabad international airport. Narendra Kumar Patel, director of Jay Ambe Gauri Chem Limited, was produced before a special Prevention of Money Laundering Act (PMLA) court in Hyderabad that sent him to ED custody till January 29, the central agency said in a statement. “Patel had deliberately absconded in 2015 and had fled the country along with his family and was residing in the USA. He could not be interrogated by the CBI. He was purposefully staying abroad and was enjoying the proceeds of crime,” it said.
Updated Jan 20, 2021 | 16:19 IST
The finance ministry has sought details from state-controlled banks on capital requirements, estimated toxic loans and plans to raise funds. Govt may keep Rs 25,000 crore in Budget 2021 for providing fund to state-run banks; PSBs to submit plans on capital needs. | Photo Credit: BCCL
New Delhi: The Centre is likely to consider capital infusion for the public sector banks (PSBs) in the upcoming Budget, and it has reportedly kept aside approximately Rs 25,000 crore in the FY22 budget for providing fund to state-controlled run banks.
Worth mentioning here is that the proposed plan assumes significance as fund infusion will boost state-owned banks as the pandemic has put borrowers under pressure, rising the threat of higher non-performing assets (NPAs).
Updated Jan 19, 2021 | 12:04 IST
Simply put, a bad bank is a financial institution created with the sole purpose of taking on non-performing assets of lenders, enabling them to refresh their books and focus on lending. Representational image.
Key Highlights
The RBI noted in its latest Financial Stability Report that gross NPAs, under a baseline scenario, may rise as high as 13.5 per cent by September 2021, up from 7.5 per cent in September 2020
The concept of a bad bank is not novel but came to prominence during the global financial crisis between 2007 and 2009
Banks, non-financial banking companies and similar institutions are critical components of the economy as they represent formal lines of credit
RBI initiates PCA against Bank of Maharashtra in view of bad loans
RBI initiates PCA against Bank of Maharashtra in view of bad loans
The Reserve Bank Has Initiated Prompt Corrective Action (PCA) Against Pune-based Bank Of Maharashtra (BoM) In View Of High Level Of Bad Loans And Negative Return On Assets. PTI | Updated on: 17 Jun 2017, 08:28:30 PM
New Delhi:
In view of high level of bad loans and negative return on assets, the Reserve Bank has initiated Prompt Corrective Action (PCA) against Pune-based Bank of Maharashtra (BoM). BoM has become the sixth state-owned lender to be put under the PCA.