The government is likely to infuse Rs 8,000 crore in around six state-owned banks including Punjab National Bank, reported The Economic Times.
The capital infusion will be in the banks that are likely to fall short of regulatory capital requirements, the report said citing an unnamed senior finance ministry official.
According to the report, there are some banks that have issued additional tier 1 capital bonds and the interest payments are due. If these banks do not meet the regulatory capital norms, they will not be allowed to make such payments.
The government cannot allow public sector banks to default on such payments, which will impact their rating, the official told the newspaper.
If the plan materializes, it will be the second capital infusion by the government in state-owned banks in recent times. The government had announced Rs 88,000 crore capital support to 20 state-run banks back in January.