New Delhi: Finance Minister P Chidambaram on Monday proposed to infuse Rs 11,200 crore in public sector banks to enhance their capital in the next financial year.
"In 2014-15, I propose to provide Rs 11,200 crore for capital infusion in public sector banks. They have opened 5,207 branches so far, against the target of 8,023 branches, and are near the goal of installing an ATM at every branch," he said in the interim Budget speech in Parliament.
The government infused Rs 14,000 crore in various public sector banks in this financial year. Of this, the State Bank of India got Rs 2,000 crore while Indian Overseas Bank received Rs 1,200 crore.
The Finance Minister said banks are under strain due to rising non-performing assets (NPAs).
"Bankers have assured me that as the economy turns they will be able to contain the NPAs, recover more loans, and build healthier balance sheets," he said.
NPAs, or bad loans, of public sector banks rose 28.5 per cent to Rs 2.36 lakh crore in September last year from Rs 1.83 lakh crore in March 2013.
Total NPAs had gone up to Rs 1.37 lakh crore in March 2012 from Rs 94,121 crore in March 2011. The amount of NPAs in September 2013 has more than doubled since March 2011.
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