The Finance Ministry is most likely to infuse Rs. 14,500 crore mainly in the banks that are under the RBI’s Prompt Corrective Action (PCA) framework to improve their financial health. Central Bank of India, Indian Overseas Bank and UCO Bank are currently under this framework that puts several restrictions on them, including on lending, management compensation and directors’ fees.
According to the news sources, the ministry has almost finalised its names of probable candidates for capital infusion. The capital infusion will help these banks to come out of RBI’s enhanced regulatory supervision or PCA framework.
Most of the large state-owned banks, including SBI, PNB, Bank of Baroda, Canara Bank, Union Bank of India, and Indian Bank, have already raised money from various market sources, including share sale on a private placement basis. For the current financial year, the government had allocated Rs. 20,000 crore for capital infusion into the PSBs for meeting the regulatory requirement.