The government may infuse an additional Rs 10,000 crore in public sector banks in FY18 itself, thereby advancing its FY19 capital infusion plan, CNBC TV18 reported citing sources.

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In addition to direct infusion of capital, the government will also be issuing recapitalisation bonds to PSU banks, the first tranche of which will consist of bonds worth around Rs 70,000 crore.

All banks will be covered under the recap bond issuance, which includes both growth capital as well as regulatory capital to cover provisioning.

In line with the government's instructions, public sector banks may start tapping markets from December onward since government approval is already in place. Banks may opt for a qualified institutional placement (QIP) and follow-on public offerings (FPO) of up to Rs 2,000 crore each.

Over 67 banks have been shortlisted to be issued recapitalisation bonds. The quantum of capital infused will be based on three-year CAGR and growth projections, sources said.

This additional infusion will come out of the Indradhanush scheme, which offers over Rs 20,000 crore of budgetary support to PSU banks from the government.

Finance Minister Arun Jaitley had announced a PSU banks recapitalisation plan of Rs 2.11 lakh crore on October 24 in a bid to shore up their finances, boost private investment and revive the economy. The plan is expected to be spread over two years to bolster banks' finances and revive the economy and is the largest such undertaking in India to date.

The government has been in discussion with the Reserve Bank of India and other banks for the bond issue and the amount to be raised for the first tranche is yet to be fixed.