Cabinet approves massive bank capitalisation of RS 2.11 lakh crores

New Delhi, October 24: The Govt has been announced a massive boost for the banking sector by approving a Rs 2.11 lakh crore bank recap plan for the ailing sector, which includes Rs 1.35 lakh crore via bank recap bonds and Rs 76,000 crore from budgetary support and market loans.

Finance Minister Arun Jaitley said the bank recapitalization plan will be implemented alongside a host of banking reforms to cut down indiscriminate lending. He did not offer any further details on the reforms.

Jaitley said that banks lended "indiscriminately" between 2008 and 2014, when gross advances increased Rs 34 lakh crore. A "large part" of this indiscriminate lending has now turned as non-performing assets, he added.

Apart from this, Arun Jaitley has announced a number of road connectivity projects at an estimated cost of Rs 7 lakh crore.

The plan, touted to be India's biggest ever, is aimed at improving economic activity and speeding up traffic flow on key corridors to make the journey shorter for faster movement of cargo vehicles and others.