Today, govt has sought Parliament’s approval to supply Rs 20,000 crore in state-run banks in the current fiscal year, in an attempt to aid lenders to ease the expected hike in loans bad due to the COVID-19 pandemic.
Finance Minister Nirmala Sitharam tabled supplementary demand for grants in Parliament, “meeting additional expenditure of Rs 20,000 crore towards recapitalisation of public sector banks (PSBs) through the issue of government securities.” However, the capital infusion will not put any extra burden on the exchequer as this would be met with proportionate savings in other outlays.
The government has already provided ₹ 3.5 lakh crore in the last five years to rescue its banks.
The government sought parliament approval for a total additional spending of ₹ 1.67 lakh crore ($22.8 billion) for the current fiscal year.
