Giving a huge relief to the struggling banking sector, the government has today announced a mega recapitalisation plan under which, it plans to give ₹2.11 lakh crores to the banks. Out of the approved amount, ₹1.35 lakh crores will be paid via bank recapitalisation bonds and the remaining ₹76,000 crores via budgetary support and market loans in the next couple of years.
The news comes as a big relief to the banking sector. The sector has been struggling on top of NPAs and low performance. According to the latest available data, 38 banks in the country have identified a total of ₹8.85 lakh crores worth of NPAs (Non-Performing Assets). In a press conference today, Arun Jaitley announced this move and also stated that the government has also approved a mega revamp project for infrastructure and that will cost ₹7 lakh crores and will be completed in next 5 years.
Speaking to the media, the finance minister stated that the growth momentum needs to be sustained and these activities will prove to be a catalyst in the coming time. Talking of the banks, he added that the banks will prove to be a huge catalyst in the economy for the time to come and they need to be supported in the maximum capacity.