Tap equity market: Govt tells 5 PSU banks

Tap

Financial News

The central government has asked five state-owned banks to raise capital from the markets to meet their requirements for the fiscal year 2017-18. The Department of Financial Services has asked the relatively strong public sector banks (PSBs) — Canara Bank, Bank of Baroda (BoB), Indian Bank, Vijaya Bank, and Syndicate Bank — with a fairly good market capitalisation to not depend on the government’s recapitalisation plan.

We have asked five strong banks that have consistently performed well, to raise funds on their own from the market. We are encouraging them to tap the market as their market capitalisation is fairly good,” said a government official.

Three banks — Vijaya Bank, Syndicate Bank, and Indian Bank — are small but with good fundamentals and a good market price. We have encouraged them to tap the market,” the official said.

The Budget has allocated Rs 10,000 crore for the recapitalisation of state-owned banks as part of Indradhanush, the seven-pronged strategy to revive PSBs.

According to government officials, these five banks are capable of raising funds on their own and won’t need capital support from the government.

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