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Recapitalisation Funds to Take Care of Credit Growth: State Bank of India

The Centre has announced recapitalisation plan of Rs 2.11 lakh crore for public sector banks, including Rs 18,139 crore through budgetary provisions, Rs 1.35 lakh crore by recapitalisation bonds, with the balance Rs 58,000 crore to be raised by banks from market.

IANS

Updated:November 4, 2017, 10:03 AM IST
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Recapitalisation Funds to Take Care of Credit Growth: State Bank of India
Picture for Representation. (Photo: Reuters)
Kolkata: The State Bank of India expects additional capital flowing from the proposed Rs 2.11 lakh crore recapitalisation plan would add to its capacity to take care of future credit growth, an official said on Friday.

The Centre has announced recapitalisation plan of Rs 2.11 lakh crore for public sector banks, including Rs 18,139 crore through budgetary provisions, Rs 1.35 lakh crore by recapitalisation bonds, with the balance Rs 58,000 crore to be raised by banks from market.

"The SBI is adequately capitalised and our capital adequacy ratio is highest among all public sector banks. We are well above the benchmark in terms of capital adequacy ratio. For extending loan growth, the bank needs capital. It will help the bank to leverage that for expanding its balance sheet further," bank's Deputy Managing Director (Chief Operating Officer), National Banking Group, Neeraj Vyas, said.

Asked on the sidelines of an event organised by the Bengal Chamber of Commerce and Industry as to how much the country's largest bank could get from the recapitalisation funds, he said: "We do not know the details."

He said it needs to be seen how the government will treat "weak" and "healthy" banks in terms of distributing the funds.

An SBI research note had said: "After provision of bad assets, we believe there may still be around Rs 1 lakh crore available for lending. The resultant multiplier impact of Rs 1 lakh crore could unleash at least Rs 3.3 lakh crore and that could go up to Rs 10 lakh crore additional infusion in the economy. This could concomitantly push up the Gross Domestic Product."
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