Centre to infuse Rs.6990 crores in public sector banks
New Delhi, Feb 7 : The Centre has decided to infuse Rs. 6990 crores in nine public sector banks (PSBs) for which orders are being issued.
This year, the Centre has adopted a new criteria in which the banks which are more efficient would only be rewarded with extra capital for their equity so that they can further strengthen their position.
The methodology for arriving the amount to be infused in these banks has been based on efficiency parameters. First of all, weighted average of return on assets (ROA) for all PSBs for last three years put together was arrived at and all those who were above the average have been considered.
The second parameter that has been used is return on equity (ROE) for these banks for the last financial year. Those who have performed better than average have been rewarded.
The allocation to banks is as follows: The State Bank of India will get Rs. 2970 crores; the Bank of Baroda (Rs. 1260 crores); the Punjab National Bank (Rs. 870 crores); the Canara Bank (Rs. 570 crores); the Syndicate Bank (Rs.
460 crores); the Allahabad Bank (Rs. 320 crores); the Indian Bank (Rs. 280 crores); the Dena Bank (Rs. 140 crores) and the Andhra Bank (Rs. 120 crores).
The government is conscious of the fact that a lot of reforms are required in these banks.
With a view to crystallize ideas for reforms, recently a two-day retreat of chairman and managing directors of banks and financial institutions called 'Gyan Sangam' was held at Pune. It generated an agenda in which banks themselves were supposed to undertake certain activities individually or jointly, and there were certain things which were supposed to be done by the government. (ANI)