Finance Minister Pranab Mukherjee may tomorrow announce recapitalisation of public sector banks to help them meet the credit demand of productive sectors, especially those hit hard by the global financial meltdown.
He had given an indication to this effect in his address to the heads of public sector banks last month.
"As the main shareholder of the public sector banks, the government has already announced that it wants to recapitalise public sector banks to enable them to achieve the CRAR (Capital to risk-weighted Assets Ratio) of 12 per cent," he had said.
He had said that the government will ensure that the credit growth of public sector banks does not suffer for want of capital.
Banks likely to benefit include Bank of Maharashtra and Dena Bank. Infusion will help these banks raise capital adequacy to over 12 per cent, much above the Basel II norm of 9 per cent.
Capital adequacy refers to the ratio of a bank's risk-weighted assets to its equity.
The government has announced capital infusion to the tune of about Rs 2,150 crore. Of this, UCO Bank will get Rs 750 crore, while Central Bank of India and Vijaya Bank will receive Rs 700 crore each.
