A committee report on project ‘Sashakt’ stated that public sector banks (PSB) in the country will need an additional capital of around Rs 1.3 lakh crore to tackle bad loans, reported Business Standard

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The report, that was submitted last month to union finance minister Piyush Goyal on project ‘Sashakt’ stated that the amount will have to be infused in the next few years as part of the strategy to tackle the bad loans.

“PSBs will require additional capital to drive the resolution through the five approaches. The overall capital requirement for resolution is expected to be about Rs 1.1-1.3 trillion. This capital will be required over a period of two fiscal years — 2018-19 and 2019-20,” said the report that was submitted by the committee, led by Punjab National Bank’s (PNB) Sunil Mehta.

As per the report, in addition to Mehta the committee also included State Bank of India (SBI) chairman Rajnish Kumar; Bank of Baroda, managing director and chief executive officer P S Jayakumar and SBI deputy managing director C Venkat Nageswar.

The committee, the report said has sought an investment of about Rs 500 billion as alternative investment funds (AIFs). In addition, the report added that the committee has sought some regulatory approvals to implement the plan including special dispensation from the Sebi to exempt the AIF from making an open offer under the takeover code.