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Government to inject more capital in state-owned banks: Finance Minister

After recent announcement of staggering Rs 2.11 lakh crore two-year road map to bolster NPA-hit public sector banks, which includes recapitalisation bonds, budgetary support and equity dilution, the public sector banks have got another boost with Finance Minister Arun Jaitley stating that the government has decided to inject more capital in state-owned banks to strengthen the banking system and spur economic growth.

Finance Minister Arun Jaitley addressing heads of state-owned banks at 'PSB Manthan', said the government has decided to put in more capital from the Budget, through bonds and banks' equity expansion and 'therefore, it is the country which is virtually going to pay to keep the banking system in good health'.

Jaitley pointed that one of the focus areas banks have taken up is to support MSMEs in the first instance because the sector creating jobs and giving boost to the economy has no access to international finance or bond market. He also assured the bankers gathered at 'PSB Manthan' that “you won't find us interfering” in commercial transactions, but “when the system is making all these changes and all these monetary contributions in order to strengthen the banking system, we want robust public sector banking system so that your ability to support growth itself increases” and added that a robust public sector banking system will have an increased ability to support economic growth.

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