Government to infuse Rs.6,990 crore in nine public sector banks

New Delhi, Feb 7: The government has decided to infuse Rs.6,990 crore in nine public sector banks (PSBs), out of the current year's budget, for which orders are being issued, an official statement said here Saturday. "This year, the government of India has adopted a new criteria in which the banks which are more efficient would only be rewarded with extra capital for their equity so that they can further strengthen their position," the statement said. The methodology for arriving at the amount to be infused in these banks has been based on efficiency parameters. "First of all, weighted average of return on assets (ROA) for all PSBs for last three years put together was arrived at and all those who were above the average have been considered. "The second parameter that has been used is return on equity (ROE) for these banks for the last financial year. Those who have performed better than average have been rewarded," it added. Stating that the central government is conscious of the fact that a lot of reforms are required in the PSBs, it arranged for the recent two-day retreat of chairman and managing directors of banks and financial institutions called 'Gyan Sangam' at Pune Jan 1 and 2, 2015.