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India will ensure that all of its public sector banks are well capitalised, said Banking Secretary Rajeev Kumar on Wednesday, while unveiling details on the government's massive bank recapitalisation plan aimed at tackling record bad debt woes.
The Union Government had this month sought Parliament approval for Rs 80,000 crore ($12.62 billion) that it plans to spend by March, as part of a two-year recapitalisation programme for its state-run banks to help them deal with bad debts and revive credit growth.
This is part of a Rs 2.11 lakh crore recapitalisation plan announced last October. Of the total sum, Rs 1.35 lakh crore is planned to be raised through recapitalisation bonds, while the banks themselves will raise another Rs 58,000 crore from share sales.
“Each public sector bank (PSB) is an article of faith. All PSBs will be adequately capitalised and enabled to serve people and support inclusive growth,” said Kumar, adding total capital injection including from the government's budget and share sales by banks will amount to over Rs 1 lakh crore ($15.70 billion) in the financial year ending March 2018.
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