PSBs poised for growth despite zero capital from govt this budget: Agencies

Decision to not earmark funds for recapitalisation reflects confidence in capital position of such banks, as well as their ability to raise funds from market

After infusing over Rs 3.6 trillion in public sector banks since 2014, the government has not earmarked any capital for these banks in this year’s budget.

According to rating agencies, the government’s decision to not earmark any funds for recapitalisation of public sector banks in this year’s union budget reflects confidence in the capital position of such banks as well as their ability to raise funds from the market.

Rating agencies said that it is highly unlikely that the government will infuse any further capital in the state-run banks, given the incremental requirement of capital by such banks was limited