State banks need more govt funds than budgeted: RBI

Central bank says it is in talks with the Finance Ministry over the issue

A planned $1.2 billion capital infusion by the government into state-run lenders during the fiscal year to March 2016 will not be enough, Reserve Bank of India (RBI) Deputy Governor S S Mundra said on Thursday.

Mundra said the RBI was in talks with the Finance Ministry over the bank capitalisation issue, but did not mention how much infusion would be required.

"We've been taking it up with the finance ministry. This is the time when many of the banks are in need of higher capital," he said.

The government had budgeted a smaller-than-expected infusion of Rs 7,940 crore ($1.24 billion) to shore up the capital of the state-run banks at the federal budget unveiled in February.

($1 = 63.9200 rupees)