In October 2017, the Finance Ministry had approved a massive amount of Rs.2.11 lac crores for Public Sector Banks (PSBs) under the recapitalisation plans and today 24 January 2018, the Union Cabinet announced an allocation of Rs.80,139 crores to 20 PSU Banks.
Here’s a known list to how much amount is allotted to which bank:
IDBI Bank: Rs 10,610 crore
Bank of India: Rs 9,232 crore
SBI: Rs 8,800 crore
UCO Bank: Rs 6,507 crore
Punjab National Bank: Rs5,473 crore
Bank of Baroda: Rs5,375 crore
Central Bank: Rs 5,158 crore
Canara Bank: Rs 4,865 crore
IOB Bank: Rs 4,694 crore
Union Bank: Rs 4,524 crore
OBC Bank: Rs 3,571 crore
Bank of Maharashtra: Rs 3,173 crore
Dena Bank: Rs 3,045 crore
Syndicate Bank: Rs 2,839 crore
United Bank: Rs 2,634 crore
Corporation Bank: Rs 2,187 crore
Andhra Bank: Rs 1,890 crore
Allahabad Bank: Rs1,500 crore
Punjab & Sind Bank: Rs 785 crore
The remaining 1.23 lac crores will be infused in a span of two years. Finance Secretary Rajiv Kumar said that all the money given to Banks will be monitored on annual basis.
This step has been taken to protect PSU banks and make their balance sheet clean from bad loans and non-performing assets. However Finance Minister Arun Jaitely assured that this will not affect fiscal deficit. In his words, “We inherited a very major problem and therefore, we have been involved in finding a solution to that problem… Our role really is not only to find a solution but also to create an institutional mechanism to make sure that what happened in the past is not repeated.”
But the question is – is 2.11 lac crores sufficient to save the drowning ship of PSBs? The answers is – NO. Collectively these banks are facing a loss of whooping 9.5 lac crores and 2.11 lac crores can not really save the Titanic until some better reforms as promised by Modi govt. are approved.
It’s said that merger of major banks can be proposed by the Finance Minister on the Union Budget day, 01 February 2018.