Decrease in capital inflows in banks in last 12 years
- PSU banks easily raised money from the market due to improved financial condition The government has not required capitalization of any state-run banks except Punjab and Sind Bank in the current financial year. This will probably save Rs 10,500 crore out of the Rs 15,000 crore earmarked for this purpose in the revised estimates (RE) for FY2. This can be considered as the lowest capital inflow by the government in the last 15 years. Last month, Punjab and Sind Bank sought approval from its board to raise equity capital of Rs 4,500 crore by issuing preference shares to the government, which would enable it to increase its capital adequacy. The government has not budgeted any amount for recapitalization for the next financial year. Public Sector Banks (PSBs) reported profit in FY11 despite the epidemic. In addition, many of them have raised significant capital in the last two years. " The senior banker said that since all public sector banks are well-capitalized, their ability