An electrician puts lights on the logo of State Bank of India (SBI) at its main branch in Mumbai, India. SBI, the largest public sector bank, will get the most money–Rs 7,575 crore this financial year, followed by Indian Overseas Bank (Rs 3,101 crore) and Punjab National Bank (Rs 2,816 crore), as part of Indradhanush, a government programme to revitalise PSU banks.
India’s struggling public sector banks are getting Rs 22,915 crore from the central government this financial year (2016-17) as part of Indradhanush, a government programme to revitalise them, announced by finance minister Arun Jaitley in August 2015.
If the unpaid loans made by India’s public-sector banks were recovered, they would be enough to pay for India’s 2015 spending on defence, education, highways, and health, IndiaSpend reported in February 2016.
Bad loans, or gross non-performing assets (NPAs) as they are called in banking parlance, of public-sector banks were Rs 4.04 lakh crore ($59 billion) in 2015, a rise of 450% since March 2011.
The crisis in Indian banking, which IndiaSpend has repeatedly flagged (here, here and here), has now reached a point where the NPAs of many public-sector banks are higher than their net worth.
Indradhanush covers seven broad areas including appointments, capitalisation and de-stressing public sector banks.
State Bank of India (SBI), the largest public sector bank, will get the most money–Rs 7,575 crore this financial year, followed by Indian Overseas Bank (Rs 3,101 crore) and Punjab National Bank (Rs 2,816 crore).
Source: Ministry of Finance
The central government allocated Rs 20,000 crore to public-sector banks in the last financial year.
The government is planning to invest Rs 70,000 crore over four financial years in public-sector banks, so that they can raise Rs 180,000 crore, the amount they need for their capital requirements–or funds they need to continue lending.
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