Union Budget 2019: Modi government injects Rs 70,000 Cr into public sector banks

New Delhi, Agencies | Updated : 05 July 2019, 01:16 PM
Finance Minister Nirmala Sitharaman during her budget speech in Parliament
Finance Minister Nirmala Sitharaman during her budget speech in Parliament

Finance Minister Nirmala Sitharaman during her maiden budget speech announced Rs 70,000 crore as additional capital for public sector banks in a bid to boost the credit. The announcement of the booster will help the PSU banks recover from bad loans and improve their financial health. The announcement of additional capital is part of government's plan to enhance the capital base of PSU banks.

Unveiling Budget 2019-20, she said non-performing assets of PSBs have come down by Rs 1 lakh crore. Banks have recovered Rs 4 lakh crore due to the Insolvency and Bankruptcy Code and other means effected in the past four years, she said.

The government has decided to infuse Rs 70,000 crore in the state-owned banks, so that credit growth can be improved, she said. Domestic credit has increased to 13 per cent. She further said the government has carried out consolidation in the PSBs, smoothly reducing their number by 8.

Following the announcment, shares of public sector banks gained up to 5 per cent Friday after Finance Minister Nirmala Sitharaman announced fund infusion of Rs 70,000 crore into PSBs to strengthen them and enhance lending capacity.

Corporation Bank jumped 5 per cent, Bank of Baroda rose by 2.20 per cent, Canara Bank by 2.19 per cent, Bank of India by 2 per cent and Indian Overseas Bank by 1.89 per cent on BSE.

Andhra Bank gained 1.67 per cent, Punjab National Bank rose by 1.64 per cent, SBI by 1.48 per cent, Indian Bank by 1.40 per cent and Bank of Maharashtra by 1.21 per cent.

(With PTI Inptus)

First Published: Friday, July 05, 2019 12:48 PM
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