The government has invested ₹2.86.043 billion in capital in public sector banks (PSBs) over the past five years and they are sufficiently capitalised, parliament was informed on Tuesday.
The government infused about 3 lakh crore between 2017-18 and 2021-22.
According to the Reserve Bank of India (RBI), the capital to risk-weighted assets (CRAR) ratio of PSBs has improved significantly over the past three years, rising from 12.20% at the end of 2018-19 to 14.34% as of 31 December 2019 December 2021 Minister of State for Finance Bhagwat K. Karad said in a written response to the Rajya Sabha.
“As reflected in their capitalization as of December 31, 2021, PSBs are currently sufficiently capitalized,” he said.
Regarding the General Insurance Corporation of India (GIC), Mr Karad said no proposal to privatize the GIC is currently under consideration by the government.
“Furthermore, according to the filings received as of 31.3.2021, the total outstanding assets were ₹38.04 lakh crore and ₹1.35 lakh crore for LIC and GIC respectively,” he said.
In order to provide a greater level of protection for depositors in banks, Mr Karad said that DICGC had increased the insurance coverage limit for depositors in insured banks from £1,000 to ₹5,000 per depositor with effect from 4 February 2020.
The deposit guarantee protection applies uniformly to all insured banks and their depositors.
“In addition, the Deposit Insurance and Loan Guarantee Act (Amendment) Act of 2021 received Presidential Assent on 08/13/2021 and became effective 09/01/2021,” he said.
The changes will allow depositors easy and time-bound access to their deposits to the extent of deposit protection through interim payments by DICGC should banks face restrictions under the Banking Regulation Act 1949, he said.