PSU Banks in spotlight as FinMin plans to ask Rs 14000 crore for recapitalization

 
source :Bloombrg UTV.:Wednesday, 2 November 2011, at 09:55 IST

The finance ministry is likely to ask for an additional Rs 14,000 crore in the second supplementary demand to fund the recapitalization programme of PSU banks in fiscal year 2012. 

Out of the total amount, Rs 4,500-7,000 crore will be allocated for capital infusion in State Bank of India (SBI) and the rest for other public sector banks.

The finance secretary-led committee, which is looking into bank recapitalization, will submit its report in a week's time. 

Recently, a clutch of PSU banks posted their second quarterly earnings for the fiscal year 2012. Here’s a look at how they performed:

Central Bank: Unable to meet street expectations, Net profit was down 36% and provisions for bad loans up 80%. The non-performing assets (NPAs) stood at 2.94% versus 2.29% in the corresponding period of last year.

Union Bank: Disappointment due to high provisioning. Provisions rose 4% against expectations of decline. All the same, the NPAs jumped to 2.04% versus 1.18%.

Punjab National Bank (PNB): Managed to keep NPAs under control. Gross NPAs were flat at 2% versus 1.9% (YoY).

Bank of Baroda: Gross NPAs were flat at 0.47% as against 0.38% (YoY).