Bank recap to come with riders

New Delhi: Not all banks will be eligible for the government's capital support this fiscal, but those who have performed relatively better and need capital most will be considered for fund infusion, sources said.

It is not necessary that all banks will be issued recapitalisation bonds in the first tranche, but the money will be given depending on the fulfilment of various parameters, including reforms undertaken, a senior official said.

Capital infusion will be contingent upon the performance, reforms undertaken and future road map, official said.

The amount of capital infusion during the current fiscal would be known after Parliament will give the nod for this, the official said, adding that the government is yet to decide on the SLR (Statutory Liquidity Ratio) status for recapitalisation bonds.

The SLR status will ensure the tradeability of bonds.

Finance minister Arun Jaitley in October had announced an unprecedented Rs 2.11-lakh-crore two-year road map to strengthen public sector banks, reeling under high non performing assets (NPAs) or bad loans. PTI


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