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Central government working on multiple solutions to beef up bank capital

News:

  • The government may be willing to make sacrifices to give state-run banks a capital boost.
  • Government may forego dividends from them, as part of a holistic plan being drawn up by the finance ministry to strengthen public sector lenders laden with bad debt that’s accumulated over the years.
  • India’s state-run banks need a lot of cash — about Rs 2.4 lakh crore capital by FY19.
  • The government is looking at a range of steps to raise money for state-run banks.
  • Allowing banks to retain their earnings and not give out big dividends is also being considered.
  • The government is also counting on lower interest rates to bulk up profits on bond holdings of banks.
  • A final decision will be taken after carefully considering government finances.

Source:ET

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