Public sector banks Current Affairs - 2019
Category Wise PDF Compilations available at This Link
The government has approved the capital infusion of Rs. 48,239 Crore into 12 State-Run Banks. The capital inclusion has been undertaken to ensure the lenders are able to maintain regulatory capital requirement and step up lending and boost overall growth.
With this latest capital infusion, the government has now the government has now provided Rs 1,00,958 crore out of the Rs 1.06-lakh-crore bank recapitalisation plan. The remaining Rs. 5,000 crore capital infusion would be used as a buffer for any contingency or growth capital for Bank of Baroda which is in the process of merging Dena Bank and Vijaya Bank with itself.
How the capital infusion will benefit these PSBs?
RBI has lifted the curbs under the Prompt Corrective Action framework on Bank of India (BoI), Bank of Maharashtra (BoM) and Oriental Bank of Commerce (OBC) in early 2019. Eight other PSBs — Allahabad Bank, United Bank of India, Corporation Bank, IDBI Bank, UCO Bank, Central Bank of India, Indian Overseas Bank and Dena Bank are still under PCA. PCA imposes curbs on expansion activities, among a number of other restrictions to help them get back to fiscal health.
The capital infusion has been undertaken to ensure that state-run lenders, which have emerged out of the PCA, remain above the triggers and help others such as Indian Overseas Bank, Central Bank, United Bank and UCO Bank meet minimum regulatory capital requirements.
Tags: Allahabad Bank • Bank of India • Bank of Maharashtra • Capital Infusion • Central Bank of India • Corporation Bank • Dena Bank • IDBI Bank • Indian Overseas Bank • Oriental Bank of Commerce • Public sector banks • UCO Bank • United Bank of India
The Finance Ministry has asked the public sector banks to gradually reduce the government’s equity to 52 per cent. Currently, some of the public sector banks have government’s holding beyond 75 per cent.
Why the disinvestment?
The decision to bring down the government’s equity to 52 per cent was taken due to the following reasons:
- Dilution of the government’s stake will help banks to meet 25 per cent public float norms set by the SEBI.
- To align with the best corporate practices.
- Encourage the banks to follow the prudential lending norms.
The Ministry of Finance has authorised the Public Sector Banks to take necessary steps in bringing down the government equity based on the marketing conditions.
Rules of SEBI
A notification under the Securities Contracts Regulations (Amendment) Rules makes it mandatory for all listed entities to have a minimum public float of 25%.
The Securities and Exchange Board of India (SEBI) was established under the provisions of the Securities and Exchange Board of India Act, 1992 on April 12, 1992. SEBI aims to protect the interests of investors in securities and to promote the development and regulate the securities market in the country.