Union Budget 2016-17: Govt to announce public sector banks consolidation plan
Government will unveil a roadmap for consolidation of public sector banks (PSBs) which are expected to get an infusion of Rs 25,000 crore next fiscal, Finance Minister Arun Jaitley said
New Delhi: Government will unveil a roadmap for consolidation of public sector banks (PSBs) which are expected to get an infusion of Rs 25,000 crore next fiscal, Finance Minister Arun Jaitley said on Monday.
Besides, the government may consider bringing down its stake in state-owed IDBI Bank to below 50 per cent, he said while presenting Budget 2016-17 in the Lok Sabha.
"Our Public Sector Banks will have to be strong and competitive. The Bank Board Bureau will be operationalised during 2016-17 and a roadmap for consolidation of Public Sector Banks will be spelt out," he said. He also added that the process of transformation of IDBI Bank has already started.
"Government will take it forward and also consider the option of reducing its stake to below 50 per cent," he said.
On the issue of stressed assets of public sector banks, the Finance Minister said, it is a legacy from the past. "Several steps have already been taken in this regard. We are not interfering in lending and personnel matters of the Banks. Structural issues have been addressed in various sectors like Power, Coal, Highways, Sugar and Steel," he said.
"The banks are putting in special efforts to effect recoveries, with a focus on reviving stalled projects. To support the Banks in these efforts as well as to support credit growth, I have proposed an allocation of Rs 25,000 crore in BE 2016-17 towards recapitalisation of PSBs," he said.
If additional capital is required by these Banks, he said, the government will find the resources for doing so.
"We stand solidly behind these banks," he added. For speedier resolution of stressed assets, Jaitley said the Debt Recovery Tribunals will be strengthened with focus on improving the existing infrastructure, including computerised processing of court cases, to support reduction in the number of hearings and faster disposal of cases.