New Delhi: The government has approved fund infusion of Rs 3,004 crore in State Bank of India during the current fiscal to boost the bank's capital base. This is a part of the capital infusion plan for the public sector banks for 2012-13, sources said.
The Finance Ministry has recently approved allocation of Rs 12,000 crore for various public sector banks including SBI, sources added. The fund transfer to various banks would be made in due course of time after they obtain necessary approvals.
Decision about the remaining Rs 3,000 crore would be taken soon, sources said. The government has made a Budgetary provision of Rs 15,000 crore for recapitalisation of public sector banks in the current fiscal.
Last fiscal, the government had infused Rs 7,900 crore in SBI to increase the Tier-I capital of the country's largest bank. Following the capital infusion in March 2012, the government holding in SBI rose to 61.58 per cent from 59.4 per cent.
SBI had raised over Rs 16,000 crore through a rights issue in 2008. In its rights issue, the government's contribution was in the form of bonds instead of cash. The government has been infusing funds in the public sector banks in the last couple of years to strengthen their finances. It has injected about Rs 32,000 crore so far in the previous two financial years.
During 2011-12, public sector banks got Rs 12,000 crore for improving their capital adequacy ratio. The government pumped in Rs 20,157 crore in public sector banks in 2010-11 to maintain tier I capital at 8 per cent and increase government's equity in some banks to 58 per cent.