20 July 2016 Current Affairs: The Narendra Modi government has allocated Rs 22,915 crore capital to meet the capitalization needs of 13 Public Sector Banks (PSBs) in the current fiscal.
This is in line with its Indradhanush initiative, aimed at restoring banking sector health.The maximum capital infusion will be for State Bank of India (SBI) at Rs 7,575 crore and the least for Allahabad Bank at Rs 44 crore.
The capital infusion exercise is based on an assessment of need as assessed from the Compound Annual Growth Rate (CAGR) of credit growth for the last five years, and banks’ own projections of credit growth. Consequent upon the exercise, 75 percent of the amount collected for each bank is being released now to provide liquidity support for lending operations as also to enable banks to raise funds from the market.
The remaining amount will be released later based on performance.