Finmin mulls additional capital infusion of Rs. 4000-5000cr in PSU banks - Angel Broking

As per media reports, finance ministry is considering additional capital infusion of Rs. 4000-5000cr in PSU banks, in addition to the budgetary provision of Rs. 14,000cr. Earlier Finance Ministry had announced that the banks would be provided additional capital to enable them to lend to borrowers in select sectors such as two-wheeler, consumer durables, etc at lower rates. Following the announcement, banks such PNB, OBC, Dena Bank, IOB, Indian Bank, IDBI Bank and others have lowered their lending rates for auto and consumer durables loans. However, it is important to note that any capital infusion at current valuations in most of these PSU banks would lead to significant book value dilution for existing shareholders.

Source : Equity Bulls

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