The Indian government has announced a capital infusion of Rs 113.36 billion capital infusion in 5 banks owned by it – Punjab National Bank, Indian Overseas Bank, Andhra Bank, Corporation Bank and Allahabad Bank. This capital infusion is expected within a week. The government had in late 2018 approved a Rs 2100 billion recapitalization plan for the public sector banks. Accordingly, it had notified recapitalization bonds to allocate Rs 800 billion to 20 of these state-run banks. The bonds, split into 6 instalments, bear interest rates between 7.35% and 7.68% and will mature between 2028 and 2033. As per the plan, the public sector banks are to get Rs 1350 billion through recapitalization bonds, and the balance Rs 580 billion through raising of capital from the market. The NPAs of banks in the country had reached a record Rs 9000 billion, while the bad loans of only the state-run banks add up to nearly Rs 8000 billion.
