No additional recapitalisation in PSBs beyond Rs 65,000 crore in FY19

New Delhi: The Finance Ministry has no plans to increase its recapitalisation amount of Rs 65,000 crore for the current fiscal implying that there will be no additional recap for banks over and above the amount already announced.

There are no plans on PSB recap over the Rs 65,000 crore earmarked for this fiscal. In August, we did a recap of Rs 11,333 crore. The recap amount is unlikely to be higher than the remaining Rs 42,000 crore, official sources said.

Officials said the Q2 results are being evaluated at present. By December end, we would be in a position to know who needs how much capital.

The Finance Ministry officials have already said that the government would infuse Rs 42,000 crore in PSU banks by March with the next tranche likely in December.

The government announced the Rs 2.11-lakh crore capital infusion programme in October last year. According to the plan, the PSBs were to get Rs 1.35 lakh crore through recapitalisation bonds, and the balance Rs 58,000 crore through capital raised from the market. Out of the Rs 1.35 lakh crore, the government has already infused about Rs 82,000 crore through bonds.

"Some big state-owned banks like SBI and PNB may not need further capital infusion from the government in 2018-19. PNB has already received regulatory capital twice so far," the official said.

State-owned banks will need less capital to meet their capital adequacy norms, as the Reserve Bank last week decided to defer the deadline for them to meet the global norms or Basel-III requirement by a year till March 2020.

The RBI Board last week, while deciding to retain the capital adequacy requirement for banks at 9 per cent, agreed to extend the transition period for implementing the last tranche of 0.625 per cent under the capital conservation buffer (CCB) by one year up to March 31, 2020.

Ratings agency Moody's Investors Service had last week said the decision of the RBI board to extend the timeline for banks to implement Basel III guidelines is 'credit negative' for PSBs.