Centre unlikely to infuse any capital into the PSBs in FY23: Report

Between FY16 and FY21, the government infused Rs 3.3 trillion into PSBs helping the banks in improving their balance sheets and the capital-to-risk-weighted assets ratio (CRAR)

The central government will not infuse any capital into public sector banks (PSBs) this financial year (FY23). According to a report in the Financial Express (FE), this will happen for the first time since FY08. 

The reason for this, according to the report, is that PSBs have recorded good profitability in FY22 and the bad loan ratio has shown steady improvement. Currently, there are no PSBs under prompt corrective action (PCA). 

"PSBs’ capital adequacy remains sound this fiscal. No PSB is under the prompt corrective action regime anymore. Also, given their improved financials, they are in a position to raise capital