Of the Rs 1.80 lakh crore capital requirement estimated by the Finance Ministry, the government is willing to provide only Rs 70,000 crore - Rs 25,000 crore each in current and next fiscal and Rs 10,000 crore each in 2017-18 and 2018-19.
"Improved valuations coupled with value unlocking from non-core assets as well as improvements in capital productivity will enable PSBs to raise the remaining Rs 1,10,000 crore from the market," a Finance Ministry statement said.
Earlier in the day, Finance Minister Arun Jaitley had sought Parliament nod for additional capital infusion of Rs 12,010 crore in PSU banks.
Along with the Budget provision of Rs 7,940 crore, the total planned capital infusion would go up to around Rs 20,000 crore.
"Rs 20,000 crore (capital infusion) would happen as early as possible. It can happen by September after we get approval from Parliament," Financial Services Secretary Hasmukh Adhia told reporters here.
The remaining Rs 5,000 crore would be provided in the second Supplementary later this year. "The Rs 25,000 crore capital this year will be allocated through three tranches," the statement said.
Of the total amount, Rs 10,000 crore would be provided to weak PSBs, Adhia said, adding that the non-performing assets of PSBs are likely to show improvement in next two quarters.
Adhia further said that third tranche of capital infusion will come in the last quarter of current fiscal which will be given to banks which will show improvement in their performance in the nine month period.
Gross NPA of PSBs at the end of March quarter stood at 5.20 percent, against 5.63 percent in December.
The Finance Ministry statement said that the estimate of capital requirement is "based on credit growth rate of 12 percent for the current year and 12 to 15 percent for the next three years, depending on the size of the bank and their growth ability".
The statement added that the government is committed to making extra budgetary provisions in 2017-18 and 2018-19 fiscals to ensure that PSBs remain adequately capitalised to support economic growth.

The Finance Ministry had last year allowed public sector banks to lower government holding in the bank to 52 percent to raise funds.
A large part of this fund would be raised through public offers made to retail customers.

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