Latest News | Govt Gave Rs 8,800 Cr Capital to SBI Without the Lender Asking for It in FY18: CAG Report
Get latest articles and stories on Latest News at LatestLY. The Department of Financial Services (DFS) had given Rs 8,800 crore to State Bank of India as part of recapitalisation exercise without the country's biggest lender asking for such funds in FY18, a CAG report presented in Parliament on Monday said.
New Delhi, Mar 27 (PTI) The Department of Financial Services (DFS) had given Rs 8,800 crore to State Bank of India as part of recapitalisation exercise without the country's biggest lender asking for such funds in FY18, a CAG report presented in Parliament on Monday said.
The department under the finance ministry did not conduct assessment of the capital requirement as per its own standard practice before recapitalisation, as per the Compliance Audit Report No. 1 of 2023 of the Comptroller and Auditor General of India on Union Government (Economic and Service Ministries - Civil) for the year ended March 2021.
Also Read | Adani Group Firms End Lower; Adani Power, Adani Transmission Fall Nearly 5%.
"DFS infused Rs 8,800 crore into SBI in 2017-18 for credit growth considering it the largest PSB in the country even though there was no demand. DFS did not conduct assessment of the capital requirement as per its own standard practice before recapitalisation," it said.
The report further said DFS considered cushion over and above the norms prescribed by the Reserve Bank of India (RBI) while recapitalising PSBs.
Also Read | India's Heat Action Plans Not Suited to Risks, Says Report.
"RBI had already prescribed enhanced capital requirement of additional 1 per cent on banks in India. This resulted in excess infusion of Rs 7,785.81 crore," it said.
DFS infused Rs 831 crore into Bank of Maharashtra in 2019-20 against the bank's demand of Rs 798 crore to avoid surrender of funds amounting to Rs 33 crore, it added.
The government recapitalises public sector banks (PSBs) for credit growth, meeting the requirement for regulatory capital, equipping better performing lenders placed under Reserve Bank of India's Prompt Corrective Action framework to come out of it and meeting capital requirement on account of amalgamation.
(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)