Money & Banking

9 PSBs to get a capital infusion of ₹6,990 cr

Our Bureau New Delhi | Updated on January 24, 2018 Published on February 08, 2015


Efficiency is a new criterion this year

Nine public sector banks will soon get a capital infusion of ₹6990 crore, the Finance Ministry has announced.

This infusion is being drawn from the ₹11,200-crore provided for in this year’s budget for capitalisation of banks.

The nine PSBs, which have been allocated funds, include the State Bank of India (₹2,970 crore), Bank of Baroda (₹1,260 crore), Punjab National Bank (₹870 crore), Canara Bank (₹570 crore), Syndicate Bank (₹460 crore), Allahabad Bank (₹320 crore), Indian Bank (₹280 crore), Dena Bank (₹140 crore) and Andhra Bank (₹120 crore).

New criterion

For this year’s allocation, a new criterion has been adopted by the Government.

Only banks that are more efficient would be rewarded with extra capital for their equity so that they can further strengthen their position, the Ministry said. The methodology for arriving at the amount to be infused into these banks has been based on efficiency parameters.

First, the weighted average of return on assets (ROA) for all public sector banks, for the last three years put together, was arrived at and all those who were above the average were considered.

Ace performance

The second parameter that has been used is return on equity (ROE) for these banks for the last financial year.

Those who have performed better than the average have been rewarded, the Finance Ministry said.

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Published on February 08, 2015
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