MUMBAI: In the 50 years since banks were nationalised, the recapitalisation bill from FY18 to FY20 at Rs 2.69 lakh crore has been higher than in the first 45 years — estimated to be less than Rs 1.5 lakh crore. In the last 10 years, the government has been consistently capitalising public sector banks (PSBs) with Rs 3.8 lakh crore between FY11 and FY20. This does not include the Rs 20,000-odd crore that Life Insurance Corporation has paid for acquiring 51% stake in IDBI Bank. The government has been forced to infuse funds after PSU banks reported collective losses from FY16 to FY19 totalling Rs 1,64,474 crore. These losses put pressure on government finances at multiple levels as the Centre lost out on dividends and tax revenue. While the bulk of the capital infusion came under the NDA II government, the maximum number of bank-delivered social schemes were also announced under this regime. These include Jan-Dhan Yojana, Pradhan Mantri Jeevan Jyoti Bima Yojana, Pradhan Mantri Suraksha Bima Yojana and Pradhan Mantri Atal Pension Yojana. Although banks were first nationalised in July 1969 with a second round of nationalisation in 1980, the capital requirement was felt only in the mid-90s. Liberalisation… Read full this story
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