Public Sector Banks set to raise Rs. 25,000 crore in the coming three months

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Public Sector Banks set to raise Rs. 25,000 crore in the coming three months

Public Sector Banks have been planning to raise Rs. 25,000 in the next three months to support credit pickup and meet any regulatory requirement. This is to be through mixed equity. State Bank of India, Punjab National Bank, and Canara Bank have also raised around Rs. 40,000 crores, from the market in the last few months.

Financial Services Secretary, Debashish Panda, seemed very positive about this venture. He said that the above mentioned public sector banks have been able to raise so much money through equity and ATI and Tier II bonds. He expects the amount to rise to Rs. 40,000 crores in the remaining months of the financial year.

Earlier this month, Canara Bank was able to raise Rs 2,000 crore while Punjab National Bank (PNB) raised Rs 3,788.04 crore through qualified institutional placement (QIP). The governor of the Reserve bank of India (RBI), Shaktikanta Das, has advised the banks to actively raise capital and not wait for a difficult situation to pop up due to the ongoing COVID-19 crisis.

Besides this, the government has also attempted to allocate Rs. 20,000 crore for capital infusion into PSBs. The Finance Ministry has also granted Rs. 5,500 crores to Punjab and Sind Bank to meet the regulatory requirement. The government also approved a capital infusion through preferential allotment of equity in Punjab & Sind Bank in November.

During 2019-2020, the government made Rs. 70,000 crores capital infusion to increase the credit to strengthen the economy. Punjab National Bank received Rs 16,091 crore, Union Bank of India received Rs 11,768 crore, Canara Bank got Rs. 6,571 and Indian Bank got Rs 2,534 crore. In fact, Debashish Panda believes that most banks have seen profits in the last year. He said that there is a lot of scope for improvement on returns and every bank is currently working on that. He was very optimistic about the profits made by every bank.

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