The government is unlikely to announce capital infusion for public sector banks in the upcoming Budget, as their financial health has improved on the back of reduction in bad loans.
Finance Minister Nirmala Sitharaman is expected to present the fourth budget of the Modi government in February next year.
To increase their resources, banks would be encouraged to raise funds from the market and also by selling their non-core assets.
The net profit of PSBs escalated to Rs 14,012 crore in the first quarter, which further rose to Rs 17,132 crore in the second quarter. The combined profit of the first half of the current fiscal is close to the total profit earned in the entire previous financial year.
During the last financial year, PSBs raised capital funds to the tune of Rs 58,697 crore, the highest amount generated in a fiscal. Capital Adequacy Ratio (CAR) of PSBs increased to 14.3 per cent at the end of June, 2021 while the provision coverage ratio of public sector banks rose to an 8-year high of 84 per cent.
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