"Rs 14,000 crore will be allocated today and then of course we will sit down with the RBI and Sebi (to decide) the manner of infusion," Finance Minister P Chidambaram said after meeting the heads of PSU banks.
He further said capital infusion would be worked in accordance to the provisions of the Banking Regulations Act in a week or so. The government will infuse capital through preferential mode of allotment.
"Bank can allot preferential capital to the government. There is a provision in the banking laws. We did it last year and we will do it this year also," he added. The capital infusion will ensure that banks have 8 per cent Tier-1 capital by the end of the current fiscal year, said the report.
"Any additional capital which will be required for the concessional lending that they are doing between now and January 31 can be factored in as an additional amount (over and above Rs 14,000 crore)," Chidambaram said.
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