Government should trim it’s stake in PSBs to 33% in next 3 years: CII
In order to achieve the objectives of recapitalising public sector banks (PSBs) and meeting financing needs of the economy, industry body CII has made a host of recommendations including re-issue of recapitalisation bonds by PSBs to the general public, and government shedding stake in most of these banks to 33 percent over the next 2-3 years.
Even as it backed the government’s proposed move to issue recapitalisation bonds to the tune of Rs 1.35 lakh crore, CII suggested an alternative whereby public sector banks (PSBs) could re-issue these bonds to the general public. Injecting capital into PSBs via recapitalisation bonds entails two steps — one where the government issues bonds to banks and mops up resources; and two, the government uses these proceeds to buy shares of banks through the rights issue and banks get the necessary capital. Recapitalisation bonds are part of the government’s Rs 2.11-lakh crore front-loaded capital injection plan for PSBs to help them clean up bad loans and ensure credit growth.
Confederation of Indian Industry - CII
President: Naushad Forbes
Motto: Charting Change Enabling Development
Headquarters: New Delhi
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