Arun Jaitley: Cabinet approved recapitalisation plan for PS banks

Finance Minister Arun Jaitley on Tuesday informed that the Union Cabinet has approved a recapitalisation plan of Rs 2 lakh 11 thousand crore for public sector banks. He said that the recapitalisation would be done in two years.

The Finance Minister said that part of this capital will be raised by the banks themselves. Bonds will also be introduced to improve their lending capacity. He said that the recapitalisation will be completed in this and the next year. Out of the total amount, Rs 1,35,000 crore will be in the form of recapitalisation bonds, whereas the remaining Rs 76,000 crore will be in the form of budgetary support.

“We believed that PSU banks at one stage did indiscriminate lending. From the lending that happened between 2008-2014, there is a big chunk which is now NPA. The NPAs were kept below the carpet,” jaitley said