Recently the Government had granted over Rs. 7500 crore of equity to six banks in order take corrective action due to the lack of performance which resulted in immense amount of bad debts being stacked up. The six banks which were in need of financial service and had received a preferential issue of shares included Bank of India, IDBI Bank, UCO Bank, Bank of Maharashtra, Dena Bank and Central Bank of India.
The Secretary of the Financial Services Rajiv Kumar assured about the functioning of the all the banks and a clean and responsible business. While discussing about the recapitalization plan, Finance Minister 'Arun Jaitley' had imposed certain conditions which has to be followed in order to avoid the repetition of the uninhibited lending of which would eventually result in non-performing assets (NPAs) for those Indian banks in the public sector. This method of recapitalization step taken by the Government of all state-run banks, it had advanced the release of funds for the above-mentioned banks in order to meet their necessities and also to resume their normal business. There were two banks which had informed about the sanction for release for preferential allotment of equity shares i.e., UCO Bank had received Rs1375 crore and IDBI Bank had received Rs 2729 crore. It was also brought to light that in the Government had set aside Rs 10,000 crore for the purpose of recapitalization of the public sector banks the Union budget although the allocation was to be set in the subsequent budget
Courtesy/By: V.S.Krishna
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07 Jan 2018
