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The capital assistance to public sector banks is expected to increase the government holding in some of them, based on the fund-raising method
The Indian government on Wednesday said that it will take a decision to infuse around Rs16,500 crore capital in state-run or public sector banks (PSBs) by the end of next month, reports PTI.
The government is expected to take a view on public sector banks' recapitalisation by April-end, financial services secretary R Gopalan said on the sidelines of an event organised by FICCI.
"We are looking at the credit flow (of various public sector banks) at the end of March. After that, we will look at Capital to Risk (Weighted) Assets Ratio (CRAR) and then Tier I (capital)," he said.
Last month, the government announced that it would give financial assistance of Rs16,500 crore to the 16 state-owned banks for shoring up their capital base.
While presenting the Budget, finance minister Pranab Mukherjee had said, "An additional sum of Rs1,200 crore is being infused now. For the year 2010-11, it is proposed to provide a sum of Rs16,500 crore to ensure that the public sector banks are able to attain a minimum 8% Tier I capital by 31 March 2011."
The government infused Rs1,900 crore in 2008-09 as Tier I capital in four public sector banks to maintain a comfortable level of capital to risk weighted asset ratio, Mr Mukherjee had said.
Besides, the finance minister proposed to provide financial support to regional rural banks to enhance their lending capacity.
"The regional rural banks which were last capitalised in 2006-07 are proposed to be further strengthened by providing additional capital so that they have adequate capital base to support increased lending to the rural economy," he had said.
The capital assistance to public sector banks is expected to increase the government holding in some of them, based on the fund raising method.
Last year, the executive board of the World Bank approved a $2-billion loan to enhance public sector banks' capital.
The State Energy Conservation Fund will be built with contributions of at least Rs2 crore each from the various states. The Fund plans to promote and implement energy efficiency and conservation programmes
The Indian government has set up a green fund with an initial contribution of Rs2 crore to promote and implement energy efficiency and conservation programmes in the states, according to a power ministry official, reports PTI.
"It is important to work with the states in the direction of energy conservation. In order to implement energy conservation measures in a more effective way and with the involvement of different states, the State Energy Conservation Fund has been created with an initial amount of Rs2 crore," said Ajay Mathur, director of the Bureau of Energy Efficiency (BEE), an arm of the power ministry.
The Fund will be built with contributions from the states that will chip in at least Rs2 crore each towards the initiative, Mr Mathur added.
Although the plan has been put to action, the Fund would be fully operational only by fiscal 2011-12, he said.
However, several states have already sent requests for grants from the Fund. "So far, we have received proposals from Kerala, Haryana, Rajasthan and Chhattisgarh, which we are evaluating. Other states have also evinced interest in this direction," Mr Mathur said.
Further, the states have also indicated the creation of a State Defined Agency (SDF) for energy conservation on the lines of the BEE. The SDF is supposed to help Special Economic Zones and small-scale units become more energy efficient.
To meet the rising power demand, the government has targeted generating 1 lakh MW in the XII Plan Period (2012-17). The government also believes that energy conservation will be able to save about 25,000MW.