FM asks banks to explore options for raising capital
The Finance Ministry has asked PSU banks to explore the possibility of setting up holding company and Special Purpose Vehicle (SPV) to raise funds for expansion as the government may not be able to provide more than Rs 8,000 crore additional capital support this fiscal, reported PTI. Meanwhile, bad loans or non-performing assets situation of state-owned banks improved to 4.44 per cent for the three-month period ended March 2014 as against 5.07 per cent at the end of December 2013. This was stated by Financial Services Secretary G S Sandhu after Finance Minister P Chidambaram took stock of annual financial performance of government banks, said the media report. Sandhu said various options like ESOPs, SPV model and holding company model were discussed during the meeting by which banks could raise funds from market to meet their capital requirement. However, no decision on any of the options was taken in want of clearances from regulators like SEBI and IRDA. "We have been telling banks that they should come out with out-of-box options...because they will also have the responsibility to raise funds from the markets," he said.
The Finance Ministry has asked PSU banks to explore the possibility of setting up holding company and Special Purpose Vehicle (SPV) to raise funds for expansion as the government may not be able to provide more than Rs 8,000 crore additional capital support this fiscal, reported PTI. Meanwhile, bad loans or non-performing assets situation of state-owned banks improved to 4.44 per cent for the three-month period ended March 2014 as against 5.07 per cent at the end of December 2013. This was stated by Financial Services Secretary G S Sandhu after Finance Minister P Chidambaram took stock of annual financial performance of government banks, said the media report. Sandhu said various options like ESOPs, SPV model and holding company model were discussed during the meeting by which banks could raise funds from market to meet their capital requirement. However, no decision on any of the options was taken in want of clearances from regulators like SEBI and IRDA. "We have been telling banks that they should come out with out-of-box options...because they will also have the responsibility to raise funds from the markets," he said.
