Government to give more loans to the banks can help 30 thousand crore rupees

For the promotion of cottage and small scale industries by distributing small loans, the central government can provide assistance to government banks in the general budget. For this, the finance ministry is evaluating the capital base of the state-owned

banks. According to sources, to help banks fulfill the minimum capital requirement, Rs 30,000 crore can be made available in the general budget of the current financial year. Finance Minister Nirmala Sitharaman will present the first budget of the second term of the Modi government on July 5

Banks need help due to decreasing economic growth.

Economic growth has slowed down to 6.8 percent in 2018-19. The challenge is to speed up the growth in the budget. This will be an important contribution to the banking sector. The government wants to increase the economic growth rate by distributing more debt. At the same time, government banks will require adequate capital for private and business work. Apart from this, five weak banks, under the RBI’s Quick Improvement Action (PCA) framework, will also need to maintain the capital required under Basel III rules.

Capital requirement for the merger of banks 

Sources said that if the government considers the integration of some other banks like Bank of Baroda, then additional capital will also be required. It is notable that in order to fulfill the additional expenditure due to the merger of Dena Bank and Vijaya Bank in BOB, the government had put the capital of Rs 5,042 crore in the new bank. In the last financial year, the government provided capital of Rs 1,06,000 crore to public sector banks.

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