New Delhi, Jul 4 (IANS): The government may continue to lend its support to banks by infusing around Rs 40,000 crore into pubic sector banks (PSBs) in FY20 as part of the exercise to strengthen them and help them push up lending.
The fund infusion is likely to be proposed as part of budget proposals for FY20 to be announced on July 5. The Interim Budget presented in February did not provide any allocation for recapitalisation.
Sources said that the capital infusion in PSBs was important to boost private investment that has slowed down and was pushing down the country's growth. It will also help banks to maintain their regulatory norms.
In FY19, the Centre had pumped in Rs 1.6 lakh crore into PSBs, helping some lenders come out of the PCA framework.