New Delhi, Feb 7 : Government will infuse Rs 6,990 crore
in nine Public Sector Banks (PSBs) and will reward efficient
banks with extra capital to strengthen their position
further.
\”Out of the current year’s budget, the Government of
India has decided to infuse Rs 6,990 crore in nine PSBs for
which orders are being issued,\” Finance Ministry said in a
statement.
This year, the government has adopted a new criteria in
which the banks which are more efficient would only be
rewarded with extra capital for their equity so that they
can further strengthen their position, stated the release.
Out of the total allocation, country’s largest lender
State Bank of India will be given Rs 2,970 crore followed by
Bank of Baroda Rs 1,260 and Punjab National Bank Rs 870
crore.
The methodology for arriving the amount to be infused in
these banks has been based on efficiency parameters.
First of all, weighted average of return on assets (ROA)
for all PSBs for last three years put together was arrived
at and all those who were above the average have been
considered.
The second parameter that has been used is return on
equity (ROE) for these banks for the last financial year.
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