Bank recapitalisation by March, says Govt

As the global economic crisis threatens to stress treasuries, India is determined to complete recapitalisation of state-run banks by March next year, Financial Services Secretary D K Mittal said on Monday.

“The global situation is uncertain and banks need to be well recapitalised. Bank recapitalisation will be completed by March end,” Mittal told reporters after a meeting of Financial Stability & Development Council.

Officials said PSU banks including SBI may need Rs 40-100 billion capital infusion to maintain Tier-I capital of 8 per cent of their total risk-weighted assets. The government is mulling Rs 10,000 crore extra capital infusion depending on the profits of the banks until March 2012.

Planning Commission recently approved Rs 14,000 crore recapitalisation plan for public sector banks in the current fiscal year 2011-12.