{"id":3694,"date":"2015-08-04T16:40:41","date_gmt":"2015-08-04T11:10:41","guid":{"rendered":"https:\/\/teekhapan.wordpress.com\/?p=3694"},"modified":"2015-08-04T16:40:41","modified_gmt":"2015-08-04T11:10:41","slug":"with-rs-70000-cr-bailout-of-banks-modis-minimum-govt-vision-has-gone-for-a-toss","status":"publish","type":"post","link":"https:\/\/vivekkaul.com\/2015\/08\/04\/with-rs-70000-cr-bailout-of-banks-modis-minimum-govt-vision-has-gone-for-a-toss\/","title":{"rendered":"With Rs 70,000 cr bailout of banks, Modi’s minimum govt vision has gone for a toss"},"content":{"rendered":"
<\/a> The press release further pointed that: \u201cIf we exclude the internal profit generation which is going to be available to PSBs (based on the estimate of average profit of the last three years), the capital requirement of extra capital for the next four years up to FY 2019 is likely to be about Rs.1,80,000 crore.\u00a0 This estimate is based on credit growth rate of 12% for the current year and 12 to 15% for the next three years depending on the size of the bank and their growth ability.\u201d The latest release by the ministry of finance suggests that public sector banks are going to need Rs 1,80,000 crore of extra capital over the next four years. Of this amount the government plans to plough in Rs 70,000 crore.<\/p>\n
\nThe government of India has planned to put in Rs 70,000 crore into public sector banks over the next four years. \u201cAs of now, the PSBs are adequately capitalised and meeting all the Basel III and RBI norms. However, the government wants to adequately capitalise all the banks to keep a safe buffer over and above the minimum norms of Basel III. We have estimated how much capital will be required this year and in the next three years till financial year 2019,\u201d a ministry of finance press release<\/a> pointed out.<\/p>\n
\nThis theme of rescuing public sector banks is something I have discussed in the past. And honestly, I am disappointed with the government deciding to spend to so much money over them. There are number of reasons for the same.<\/p>\n