<p>Budgetary allocation of Rs 25,000 crore notwithstanding, the government is ready to provide more fund to public sector banks to help them get rid of their deep-rooted bad loan problem.<br /><br /></p>.<p>“We will provide more money as necessary to ensure that our banks are well-capitalised,” Minister of State for Finance Jayant Sinha said at a conference of PSU banks — Gyan Sangam — on Friday.<br /><br />He said the Reserve Bank of India too has made certain changes that will strengthen the bank balance sheet. Besides, the government has also chalked out a consolidation roadmap for banks in the Budget, and a Bank Board Bureau (BBB) has been created with former CAG Vinod Rai as its chairman.<br /><br />The BBB will work towards better capitalisation of public sector lenders.“We have now a very good sense of...stressed assets. We believe that the stressed assets are about Rs 8 lakh crore of the total advances that public and private sector banks...,” Sinha said.<br /><br />The government has allocated Rs 70,000 crore for recapitalisation of PSU banks, of which Rs 25,000 crore will be handed out to them in fiscal year 2016-17. But the allocation is criticised by many as far too little, compared with the lakhs of crores of stressed assets in this sector. <br /><br />“We have about 11.25% of the numbers of stressed assets in the system right now. The good news in all of this is two-fold that the set of stressed assets are stabilised, we know where they are and we know how to deal with them,” Sinha further added.<br /><br />Asset quality<br /><br />Sinha said the bank transformation agenda will be carried out in phases. At present, the government is in the second phase of transformation where asset quality or non-performing assets are being looked into.<br /><br />“We were in phase II, when we were looking at asset quality and really trying to assess the system-wise balance sheet of individual banks so that the process was a necessary pre-condition before we get into the third phase,” Sinha said. <br /></p>
<p>Budgetary allocation of Rs 25,000 crore notwithstanding, the government is ready to provide more fund to public sector banks to help them get rid of their deep-rooted bad loan problem.<br /><br /></p>.<p>“We will provide more money as necessary to ensure that our banks are well-capitalised,” Minister of State for Finance Jayant Sinha said at a conference of PSU banks — Gyan Sangam — on Friday.<br /><br />He said the Reserve Bank of India too has made certain changes that will strengthen the bank balance sheet. Besides, the government has also chalked out a consolidation roadmap for banks in the Budget, and a Bank Board Bureau (BBB) has been created with former CAG Vinod Rai as its chairman.<br /><br />The BBB will work towards better capitalisation of public sector lenders.“We have now a very good sense of...stressed assets. We believe that the stressed assets are about Rs 8 lakh crore of the total advances that public and private sector banks...,” Sinha said.<br /><br />The government has allocated Rs 70,000 crore for recapitalisation of PSU banks, of which Rs 25,000 crore will be handed out to them in fiscal year 2016-17. But the allocation is criticised by many as far too little, compared with the lakhs of crores of stressed assets in this sector. <br /><br />“We have about 11.25% of the numbers of stressed assets in the system right now. The good news in all of this is two-fold that the set of stressed assets are stabilised, we know where they are and we know how to deal with them,” Sinha further added.<br /><br />Asset quality<br /><br />Sinha said the bank transformation agenda will be carried out in phases. At present, the government is in the second phase of transformation where asset quality or non-performing assets are being looked into.<br /><br />“We were in phase II, when we were looking at asset quality and really trying to assess the system-wise balance sheet of individual banks so that the process was a necessary pre-condition before we get into the third phase,” Sinha said. <br /></p>
