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7 PSU banks to be recapitalised

Posted by Yogesh on Wednesday, 22 October, 2008

NEW DELHI: Finance Minister P Chidambaram on Wednesday said that seven PSU banks having a capital adequacy ratio of below 10% would be recapitalised.

“We can again re-visit policy rates if liquidity remains benign and inflation continues to moderate.” Chidambaram added

Yesterday, Chidambaram held a meeting with senior bankers in the backdrop of easing liquidity situation following a slew of measures taken by both RBI and the government.

“The meeting reviewed situation in the light of easing liquidity situation,” Punjab National Bank Chairman and Managing Director K C Chakrabarty said.

Credit delivery to productive sector was also discussed during the meeting, he said.

The meeting was also attended by State Bank of India Chairman O P Bhatt and Indian Banks Association and Bank of India Chairman T S Narayanaswami.

When asked whether any meeting with Prime Minister was also there on the day, Chakrabarty said, “I am not aware of that.”

Last month, owing to the tight liquidity situation, many banks had tightened their purse and went slow on credit disbursal.

Cash in the market dipped to the extent that inter-bank call money rates went as high as 23 per cent.

However, Finance Minister P Chidambaram came to the rescue of borrowers.

“Our banks are ready and willing to provide credit. Suitable advisories are being issued to the banks,” he had said.

Following this, RBI issued a notification saying, “In view of the improved liquidity in the markets, the banks concerned are advised to review all such cases and permit drawal of sanctioned limits, guided by their usual commercial judgment.” Source The Economic Times

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