The government of India has decided to infuse Rs 6,990 crore in nine public sector banks (PSBs) out of the current year’s budget to strengthen their capital base. The government had allocated Rs 11,200 crore in the Budget for 2014-15 for capital infusion. The beneficiaries are,
- State Bank of India – Rs 2,970 crore
- Bank of Baroda – Rd 1,260 crore
- Punjab National Bank – Rs 870 crore
- Canara Bank – Rs 570 crore
- Syndicate Bank – Rs 460 crore
- Allahabad Bank – Rs 320 crore
- Indian Bank – Rs 280 crore
- Dena Bank – Rs 140 crore and
- Andhra Bank – Rs 120 crore
The Capital Infusion is being done on the basis of new efficiency parameters such as return on assets and return on equity. The government had infused a capital of,
- Rs 12,000 crore in 2011-12
- Rs 12,517 crore in 2012-13
- Rs 14,000 crore in 2013-14
What is Capital Infusion?
Capital infusion is a process where the funds are injected into startup companies or ailing companies by an investor with a financial interest in the company.
It also refers to the process of transferring money from a successful unit of a company to another unit that is not doing well.