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India seeks $3.2 bn from World Bank to recapitalise PSU banks

India seeks $3.2 bn from World Bank to recapitalise PSU banks
PTI
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First Published: Fri, Aug 07 2009. 04 08 PM IST
Updated: Fri, Aug 07 2009. 04 08 PM IST
New Delhi: The government has sought a $3.2 billion loan from the World Bank to infuse capital into public sector banks, the Lok Sabha was informed on Friday.
Minister of state for finance Namo Narain Meena responded in the affirmative, in a written reply to the Lok Sabha to a query on whether loans from the multilateral lending agency contain a proposed $3.2-billion for recapitalising state-run banks.
“To enable the PSBs to meet credit requirements of the economy while maintaining a healthy and comfortable level of regulatory capital to risk-weighted assets ratio, a proposal has been sent to the World Bank,” he said.
However, on whether the government proposes to borrow funds from the World Bank to prop up the banking system, he said, “The assessment of the Indian financial system during 2007-08 done by the Reserve Bank of India shows that the banking sector in India continues to be healthy, sound and resilient.”
Meena further said that India is taking loans from the International Bank for reconstruction and development (IBRD) and credit (soft loan) from the International Development Association (IDA).
“The cumulative commitment of the World Bank (IBRD and IDA) loans to India till June 2009 is $73.93 billion.
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First Published: Fri, Aug 07 2009. 04 08 PM IST