NEW DELHI, Jan 24 (Reuters) - India will ensure that all of its public sector banks are well capitalized, said Banking Secretary Rajeev Kumar on Wednesday, while unveiling details on the Indian government’s massive bank recapitalization plan aimed at tackling record bad debt woes.
The Indian government this month sought parliament approval for 800 billion rupees ($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 2.11 trillion-rupee recapitalisation plan announced last October. Of the total sum, 1.35 trillion rupees is planned to be raised through recapitalisation bonds, while the banks themselves will raise another 580 billion rupees 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 1 trillion rupees ($15.70 billion) in the financial year ending March 2018.
$1 = 63.6875 Indian rupees Reporting by Neha Dasgupta and Devidutta Tripathy; Writing by Euan Rocha