Central Bank of India, Punjab & Sind Bank, and other weak public sector lenders (PSBs) will get a huge share of Rs 15,000 crore earmarked for capital infusion in state-owned banks for the current fiscal. The capital will be infused in the banks mostly that had got money through non-interest-bearing bonds in the previous year. This capital support will help these public sector banks efficiently meet regulatory requirements.
Punjab & Sind Bank earlier this month got board approval to raise equity capital worth Rs 4,6000 crore by issuing preference shares to the government. This would help the bank augment capital to the required level and save it from coming under the prompt corrective action framework. The quantum for other banks is expected to be taken in March and consequently, funds would be infused.
The first capital infusion was in Punjab & Sind Bank through non-interest-bearing bonds in the third quarter of 2020-21. Later Rs 4,800 crore was infused in Central Bank of India, Rs 3,000 in Bank of India, Rs 2,600 in UCO Bank, and Rs 4,100 crore in India Overseas Bank.
