Government seeks $4.2 bn from World Bank to recapitalise banks

February 16th, 2009 - 6:12 pm ICT by IANS  

New Delhi, Feb 16 (IANS) The government has sought an additional $4.2 billion loan from the World Bank, majority of which will be used to recapitalise four state-run banks, a top official said here Monday.

“The government has sought additional world bank spending of $4.2 billion. The intention is to capitalise banks with capital-to-risk-weighted assets ratio (CRAR) lower than 12 percent,” Finance Secretary Arun Ramanathan told reporters.

“We will recapitalise four banks this fiscal - UCO bank, Central Bank of India, Vijaya Bank and United Bank of India,” he said.

Ramanathan said the banks re-capitalisation would be carried out over a period of two-and-a-half years and the rest of the amount would be diverted to the state-run companies, Power Grid Corp and India Infrastructure Finance Co Ltd.

“We are trying to push CRAR of all banks to 12 percent. At the moment, we don’t have any bank with CRAR lower than 10 percent,” he added.

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