Government of India (GoI) announced recapitalisation of Public Sector Banks (PSBs) to the tune of ₹ 2.11 lakh crore in October 2017, through infusion of capital by the Government and raising of capital by banks from the markets. ₹ 88,139 crore was infused by the Government in PSBs during financial year (FY) 2017-18 after the recapitalisation announcement and provision of ₹ 65,000 crore has been made in the budget for the current financial year for infusion. Since the recapitalisation announcement till November 2018, PSBs have been recapitalised to the tune of ₹ 1,28,861crore through infusion and mobilisation of capital from the market. Bank-wise details of capital infusion by the Government in FY 2017-18 and current FY 2018-19, up to 30.11.2018), are in the Annexure. 

The benefits that have accrued to customers, include, inter alia, the following:- 

1. increasing access to banking services from home and mobile through digital banking and enhanced customer ease,
2. unprecedented financial inclusion, Jan Dhan programme by the Government has enabled opening of bank accounts for millions of previously unbanked customers (about 33.46 crore such accounts have been set up as of 5.12.2018, with balance of about ₹ 84,800 crore) and allowing users to receive government subsidies (as DBT) and to access remittances, credit, insurance, and essentially being included financially,
3. increased availability of loans upto ₹ 10 lakh to the non-corporate, non-farm small/micro enterprises under Pradhan Mantri MUDRA Yojana (PMMY), wherein a borrower can approach any of the lending institutions or can apply online through portal. (during FY 2017-18, 4.81 crore loans were sanctioned and in the current financial year, as on 7.12.2018, 2.81 crore loans MUDRA loans have been sanctioned,
4. increasing lending to MSMEs through time-bound automated processing and transparent status-tracking, with financially and technologically strengthened banks leveraging digitalised bank statements and income-tax and GST returns and according in-principle loan sanction within 59 minutes, and
5. meet the production credit requirements of the farmers in a timely and hassle-free manner by introducing RupayKisan Credit Card.

India’s global-rank for “getting creit” as per World Bank’s Ease of Doing Business Index, has improved from 44 in 2016 to 22 in 2018.

 

Annexure

Capital Infusion by Government

Amounts in crore Rupee

S. No	Bank	2017-18	2018-19 (up to 30.11.2018)
1	Allahabad Bank	1,500	4,844
2	Andhra Bank	1,890	2,019
3	Bank of Baroda	5,375	-
4	Bank of India	9,232	-
5	Bank of Maharashtra	3,173	-
6	Canara Bank	4,865	-
7	Central Bank of India	5,158	2,354
8	Corporation Bank	2,187	2,555
9	Dena Bank	3,045	-
10	IDBI Bank Limited	12,471	-
11	Indian Bank	-	-
12	Indian Overseas Bank	4,694	2,157
13	Oriental Bank of Commerce	3,571	-
14	Punjab National Bank	5,473	8,247
15	Punjab and Sind Bank	785	-
16	Syndicate Bank	2,839	728
17	UCO Bank	6,507	-
18	Union Bank of India	4,524	-
19	United Bank of India	2,634	-
20	Vijaya Bank	1,277	-
21	State Bank of India	8,800	-

            Source: PSBs

This was stated by Shri Shiv Pratap Shukla, Minister of State for Finance in a Written Reply to a Question in Rajya Sabha.

Recapitalisation of public sector banks to bolster lending capacity and expand digital financial inclusion and credit access. The Government announced a recapitalisation of public sector banks through direct capital infusion and market raising to restore bank capital buffers; bank wise allocations for FY 2017 18 and FY 2018 19 (up to 30 November 2018) are tabulated. The recapitalisation aims to enable expanded lending and digital delivery, supporting financial inclusion via Jan Dhan, micro and small enterprise credit under PMMY, time bound automated MSME lending leveraging digital records, and agricultural production credit through Rupay Kisan Credit Cards, and is linked to an improved Ease of Doing Business ranking for getting credit.