- 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.