3 PSBs raised ₹40K cr, likely to raise another ₹25K cr this FY1 min read . Updated: 20 Dec 2020, 11:54 AM IST
Public sector banks are planning to raise the money through a mix of equity and debt in the next three months to support credit pick-up and meet regulatory requirements. In the last few months lenders including SBI, Canara Bank and PNB have raised about ₹40,000 crore from the market
Public sector banks (PSB) are planning to raise close to ₹25,000 crore through a mix of equity and debt in the next three months to support credit pick-up and meet regulatory requirement.
In the last few months lenders including State Bank of India, Canara Bank and Punjab National Bank (PNB) have raised about ₹40,000 crore from the market, Financial Services Secretary Debasish Panda told PTI in an interview.
"Banks have been able to raise a lot of money from the markets. About ₹40,000 crores have been raised by the public sector banks both in the form equity and also AT1 and Tier II bonds. We will expect another 20,000-25,000 during the remaining part of the financial year," he said.
Earlier this month, Canara Bank raised ₹2,000 crore while Punjab National Bank (PNB) raised ₹3,788.04 crore through qualified institutional placement (QIP).
RBI Governor Shaktikanta Das has been advising banks to proactively raise capital and not wait for a difficult situation to arise due to the ongoing COVID-19 crisis.
Besides, the government has allocated ₹20,000 crore for capital infusion into PSBs in the current fiscal. Of this, the Finance Ministry has granted ₹5,500 crore to Punjab & Sind Bank to meet the regulatory requirement. The government approved capital infusion through preferential allotment of equity shares in Punjab & Sind Bank last month.
During 2019-20, the government made ₹70,000 crore capital infusion into the PSBs to boost credit for a strong impetus to the economy.
Punjab National Bank got ₹16,091 crore, Union Bank of India received ₹11,768 crore while Canara Bank and Indian Bank got ₹6,571 crore and ₹2,534 crore, respectively.
Talking about the financial health of banks, Panda said that 11 out of the 12 public sector banks have posted profit in the last quarter.
Even gross non-performing assets (NPAs) have gone down substantially and the provision coverage ratio has increased, he said.
"There is some scope for improvement on return on assets and banks are working on that. By and large all the financial parameters are showing very very positive results," he said. PTI DP MR MR