"Rs 11,200 crore (Rs 112 billion), that is the provision we have made (in interim budget), although there was higher requirement and the balance which can be Rs 6,000-8000 crore (Rs 60-80 billion)," said Financial Services Secretary G S Sandhu after a meeting of Finance Minister P Chidambaram with the heads of public sector banks.
"I am told that we can provide Rs 6-8,000 crore (Rs 60-80 billion) additional capital to PSU banks," he added.
The decision in this regard, however, is expected to be taken by the new government.
The government infused Rs 14,000 crore (Rs 140 billion) in public sector banks during the financial year ending March 31, 2014.
Of this, the State Bank of India got Rs 2,000 crore (Rs 20 billion), while Indian Overseas Bank received Rs 1,200 crore (Rs 12 billion).
In view of the Basel III, or global prudential banking norms, all banks have been planning to shore up their Tier 1 capital.
According to the Reserve Bank, Indian lenders will require additional capital of Rs 5 lakh crore (Rs 5 trillion) to meet the new global banking norms, Basel III.
That apart, Sandhu said bad loans or NPAs in the public sector banks are a cause for concern for all stakeholders.
However, due to vigorous recovery efforts of the banks' NPA situation has improved in the final quarter of the last fiscal, as compared to the October-December period of 2013-2014.
"In the last quarter, there is an improvement in the NPA front.
“We do hope this trend will continue because this has happened due to vigorous recovery effort by various banks and by various other measures like cost cutting on account cheaper funds and cheaper deposits," Sandhu said.
He informed that the gross non-performing assets in January-March quarter in 2013-14 improved to 4.44 per cent from 5.07
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