According to a senior official, the remaining capital infusion of Rs. 5,000 crores will be pumped by the government for the current fiscal year in Bank of Baroda ahead of its merger with Dena Bank and Vijaya Bank.
On Feb. 20, government infused Rs. 48,239 crores in 12 public sector banks but skipped Bank of Baroda. Financial Services Secretary Rajiv Kumar, while announcing the recapitalization of public sector banks, has said that the pending of Rs. 5,000 crores may be cast-off as a contingency or for the development of the bank’s merged entity.
Anil Gupta, Vice President at ICRA told, “The capital infusion if announced will largely be in line with the estimates for the financial year 2018-19 as we expect the merged entity will need additional capital on being classified as Domestic-Systemically Important Bank (D-SIB)” The merger is expected to receive Rs. 5,500-6,000 crore from the government, as per the rating agency ICRA Ltd.
The government had sought Parliament’s approval in December to infuse an additional Rs. 41,000 crores in state-owned banks. Earlier, the government had announced an infusion of Rs. 65,000 crores in Public Sector Banks in 2018-19.