Finance Ministry announces roadmap for Recapitilization of Banks

NewDelhi Jan 24: The government on Wednesday has today announced the roadmap for Recapitalization of the banks that was announced last year.Finance Minister Arun Jaitley has held a press conference and announced the roadmap.

The minister has said that "depositors money in these banks is safe and no state-owned bank would fail. The government's commitment to maintaining the health of these banks is firm and unequivocal".

Earlier the government had announced a package of Rs 2.11 CR to revive the public sector banks which are in ill health because of the rising NPA problems. The govt had announced that no PSB would be allowed to fail.

The funds would be given based on the following guidelines

# Banks to reorient themselves to support MSME growth
# Recapitalisation will depend on the basis of the performance of the banks.
# Banks should not get into all activities, must concentrate on core strengths. Each bank to adopt a policy in accordance with their core strengths
# PSU banks need to identify non-core assets to monetise
# Banks to minimize their exposure to big corporate loans to 10 percent in a consortium borrower and all loans above Rs 250 cr will undergo special monitoring.
#Banks to be given capital based on customer responsiveness, responsible banking, credit offtake through technology and cleanliness, MSME friendliness, financial inclusion, and digitization deepening.
#Customers money is safe in banks. They will get their money back if bank is found indulging in fraudulent activities.
#Every PSB to promote apps for easy opening of accounts, doorstep banking
#A survey will be conducted by a reputed agency annually which will reveal their performance
#Breach of any loan covenant will be shared with entire lending consortium as a red flag.