The Union Government on Thursday, January 4, sought Parliament's approval for an additional expenditure of Rs. 80,000 crore towards recapitalization of public sector banks by issuing government securities. The additional spend formed part of the third batch of Supplementary Demand of Grants for 2017-18.
This will not entail any cash outgo for the government because the additional spend will be matched by the additional receipts on the issue of securities (recap bonds) to public sector banks, official sources said.
The additional spend is the first tranche of the Rs. 1.35-lakh crore bank recapitalization bonds that are planned to be issued as part of the overall Rs. 2.11-lakh crore capital infusion plan for PSBs announced in October last year.
Although there won't be any cash outgo from the Central budget on this account, there is still no clarity as to whether it may affect the fiscal deficit or not.
First step in recapping PSBs
By IndianMandarins - 2018-01-05 10:20:52
The Union Government on Thursday, January 4, sought Parliament's approval for an additional expenditure of Rs. 80,000 crore towards recapitalization of public sector banks by issuing government securities. The additional spend formed part of the third batch of Supplementary Demand of Grants for 2017-18.
This will not entail any cash outgo for the government because the additional spend will be matched by the additional receipts on the issue of securities (recap bonds) to public sector banks, official sources said.
The additional spend is the first tranche of the Rs. 1.35-lakh crore bank recapitalization bonds that are planned to be issued as part of the overall Rs. 2.11-lakh crore capital infusion plan for PSBs announced in October last year.
Although there won't be any cash outgo from the Central budget on this account, there is still no clarity as to whether it may affect the fiscal deficit or not.
