Union Budget 2019: Bank recapitalisation to take place in two stages

Recapitalisation will involve two legs - first, banks will subscribe to bonds floated by the govt. In the second leg the govt will infuse that money into public sector banks

The Union government will infuse Rs 70,000 crore into public sector banks (PSBs) in 2019-20 to strengthen and enhance their lending capacity.

While presenting her maiden Budget, Union Finance Minister Nirmala Sitharaman said the government had decided to infuse more capital into PSBs so that credit growth could be improved.

Recapitalisation will involve two legs — first, banks will subscribe to bonds floated by the government.

In the second leg the government will infuse that money into public sector banks, bankers said. The same method was adopted last year for giving capital to banks.

Over the last five financial years (FY15 to FY19), PSBs