The government on Friday sought approval for an additional
allotment of Rs 12,110 crore from the Parliament to be used for the
recapitalisation of public sector banks.
In the Budget, Finance Minister Arun Jaitley had made an allotment of Rs 7,940. Analysts say, the Reserve Bank of India and economy watchers had deemed the amount insufficient.
However, former RBI Deputy Governor Subirn Gokarn believes that on the ground it will do little to help PSU banks' capacity to lend.
"It is at best a mandate. It will go towards provisioning. The idea is to get banks to lend more. The balance sheet issues of public sector banks need to be addressed, which this won't do," Former RBI Governor told NDTV.
Public sector banks are in dire need of capital infusion, analysts say.
Shares of public sector bank spiked after the news of the recapitalisation. SBI, the country's largest lender rose over 4 per cent to Rs 268.
The government on Friday also sought Rs 4500 crore for National Highway Authority of India payments.
The government has a budget target of spending Rs 17.77 lakh crore in the current fiscal year.
In the Budget, Finance Minister Arun Jaitley had made an allotment of Rs 7,940. Analysts say, the Reserve Bank of India and economy watchers had deemed the amount insufficient.
However, former RBI Deputy Governor Subirn Gokarn believes that on the ground it will do little to help PSU banks' capacity to lend.
"It is at best a mandate. It will go towards provisioning. The idea is to get banks to lend more. The balance sheet issues of public sector banks need to be addressed, which this won't do," Former RBI Governor told NDTV.
Public sector banks are in dire need of capital infusion, analysts say.
Shares of public sector bank spiked after the news of the recapitalisation. SBI, the country's largest lender rose over 4 per cent to Rs 268.
The government on Friday also sought Rs 4500 crore for National Highway Authority of India payments.
The government has a budget target of spending Rs 17.77 lakh crore in the current fiscal year.
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