SBI expects substantial portion of govt recapitalisation
Kolkata: State Bank of India (SBI) is expecting to get a substantial chunk of the government’s recently announced Rs2.11 trillion recapitalisation plan for public sector banks.
“The government had announced the recapitalise the public sector banks to the tune of Rs 2.11 trillion. SBI, being the biggest among them, expects to get a substantial portion of that,” a senior official of the bank said.
He said that although the bank was sufficiently capitalised, the additional capital which would flow in due to recapitalisation would help the bank in dealing in stressed assets as well as to fund future credit growth, which was expected to pick up from 2018-19.
Moreover, the internal accruals through generation of profits would also help in building up the capital base of the base of the bank, which was now well above the Reserve Bank of India (RBI) stipulated requirement.
The official said that lots of assets were under stress which SBI would have to address. “Now we have avenues like the NCLT (National Company Law Tribunal) and IBC(Insolvency and Bankruptcy Code). The issue is whether we have enough capital,” he said.
For the public sector banking system as a whole, there would be restrictions in terms of getting money. Now it required to be seen how the government treated the weak and healthy banks in terms of giving capital, he said.
“SBI is a very healthy bank. How much money we will get will depend whether the government decided to fund more the weak ones to make them healthy or otherwise,” he said.