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capital market: Finmin asks banks to tap capital market

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New Delhi: The finance ministry on Friday asked state-run lenders to strengthen their balance sheets and tap the capital market. “Banks were told to strengthen their balance sheets by raising capital from the market,” said an executive aware of the developments, adding that the government want banks to push lending in the productive sectors of the economy.

In FY21, public sector banks (PSBs) recorded a net profit of ₹31,820 crore-the highest in the last five financial years. The government has not allocated any capital towards bank capitalisation in the current fiscal.

Financial Services secretary Sanjay Malhotra suggested that PSBs should explore more collaboration and that large banks should share their best practices with small lenders and guide them in areas where they need more expertise, said an official with Indian Banks’ Association (IBA).

Manthan 2022 was held to brainstorm with the top leadership of PSBs and unlock next-generation reforms…

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