Bank recapitalisation: PNB, 7 other PSBs to raise money from mkt by March

Published On: 03, Dec 2017 | Source:

As many as eight public sector (PSBs) have decided to raise capital from the market within four months as part of the Rs 2.11 lakh crore plan, according to official sources.

Some have already got approval from the ministry while others are in the process of getting the green signal for raising capital either through private placement or the rights issue, they said.

Most are preferring the Qualified Institutional Placement (QIP) route, sources said, adding that National (PNB) would be the first to hit the market to raise Rs 5,000 crore.

of Baroda, of India, Union of India, and are also gearing up for the share sale, they said.

Minister in October had announced an unprecedented Rs 2.11 lakh crore two-year roadmap 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 includes floating re-capitalisation bonds of Rs 1.35 lakh crore and raising Rs 58,000 crore from the market by diluting government's stake.

The government equity, as per the current policy, can come down to 52 per cent in state-owned

Jaitley had also announced that would get about Rs 18,000 crore under the Indradhanush plan over the next two years.

Under the Indradhanush road map announced in 2015, the government had announced infusion of Rs 70,000 crore in state- owned over four years while they will have to raise a further Rs 1.1 lakh crore from the market to meet their capital requirement in line with global risk norms, known as Basel-III.

In the last three-and-a-half years, the government pumped in Rs 51,858 crore capital in the PSBs. The remaining Rs 18,142 crore will be injected into the over the next two years.