The government’s Rs 23,000-crore equity infusion will provide some respite to the public sector banks (PSBs), but their capital needs are significantly higher than the budgeted amount, Moody’s Investors Service has said. “The capital infusion will provide some respite for the recipient banks, especially those with weak capitalisation,” Moody’s said, adding the infusion is positive for banks, but their capital needs remain elevated. “Therefore, unless the government increases the planned amount of capital for infusion, the capital needs of public sector banks remain significantly above the amount budgeted by the government,” it said. Earlier this week, the government announced a Rs 22,915 crore capital infusion into 13 PSBs. Out of the Rs 22,915 crore infusion, State Bank of India (SBI) received Rs 7,575 crore followed by IOB (Rs 3,101 crore) and Punjab National Bank (Rs 2,816 crore).

Source: Hindustan Times July 22, 2016 04:52 UTC