Finance Minister P Chidambaram on Monday projected while interim budget announcement to inject Rs. 11,200 crore in public sector banks to improve their assets in financial year 2014–15 (FY’15). The government had infused Rs. 14,000 crore in PSU banks during FY’14.
Banks are under strain due to rising non-performing assets (NPAs), said Union Finance Minister. However, ‘Bankers have assured (Chidambaram) that as the economy turns they will be able to contain the NPAs, recover more loans, and build healthier balance sheets’, he said.
‘In 2014–15, I propose to provide Rs. 11,200 crore for capital infusion in public sector banks. They have opened 5,207 branches so far, against the target of 8,023 branches, and are near the goal of installing an ATM at every branch’, he said in the vote on account speech in Parliament.
NPAs, or bad loans, of PSU banks rose 28.5% to Rs2.36 lakh crore in September 2013 from Rs. 1.83 lakh crore in March 2013. Total NPAs had gone up to Rs. 1.37 lakh crore in March 2012 from Rs. 94,121 crore in March 2011