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Will help PSBs meet CAR norms: Pranab

The government will infuse sufficient funds in SBI and other public sector banks to enable them to achieve compliance with capital adequacy ratio norms, finance minister Pranab Mukherjee said on Wednesday..

The government will infuse sufficient funds in SBI and other public sector banks to enable them to achieve compliance with capital adequacy ratio (CAR) norms, finance minister Pranab Mukherjee said on Wednesday..

At the annual economic editors’ conference, he said that enough capital will be infused in the banks to ensure that 8% tier 1 capital is maintained. Rating agency Moody’s has recently downgraded the credit rating of SBI, citing inadequate capital and poor asset quality as reasons. Following the downgrade, major private sector lenders like ICICI Bank, HDFC Bank and Axis Bank now have a better standing than SBI in terms of their credit rating.

Meanwhile, Financial Services Secretary D K Mittal said that the capital requirement in different scenario for all public sector banks is between R10,000 crore and R20,000 crore and that would be met by end of this fiscal. In the budget 2011-12, R6,000 crore have been allocated for capital infusion in the state-owned banks and the additional amount would be sought through second batch of supplementary demands for grants to be tabled in the winter session of Parliament.

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First published on: 20-10-2011 at 02:34 IST
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