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Published in:

Volume 6 Issue 6
June-2019
eISSN: 2349-5162

Unique Identifier

JETIRCK06006

Page Number

45-54

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Title

Impact of Recapitalization on the performance of public sector banks. A study on IDBI, Sate Bank of India and Punjab National Bank.

ISSN

2349-5162

Cite This Article

"Impact of Recapitalization on the performance of public sector banks. A study on IDBI, Sate Bank of India and Punjab National Bank.", International Journal of Emerging Technologies and Innovative Research (www.jetir.org), ISSN:2349-5162, Vol.6, Issue 6, page no.45-54, June-2019, Available :http://www.jetir.org/papers/JETIRCK06006.pdf

Abstract

The Government of India announced the recapitalization package for public sector banks with INR 2.11 lakh crore on 24th October 2017. The Government bifurcated the Rs 2.11 lakh crore amount for recapitalisation into two parts: First through budgetary allocation of Rs. 76,000 lakh crore and Rs 1.35 lakh crore by issuing recapitalisation bond. On 24th January 2018, the Government pledged to inject INR 88,140crore into twenty public sector banks. Rs. 80,000 crores was raised by issuing recapitalisation bonds and Rs. 8,140 crore through budgetary allocation. The Government intends to adequately capitalise the public sector and to reduce the NPA level, enable them to serve people and support inclusive growth. The study has been undertaken to analyse the effect of recapitalisation on the performance of public sector banks considering two different events (24th October 2017 and 24th January 2018). The study uses paired sample t test to analyse the effect of recapitalisation on Nifty PSU index (6 month and 9 months), Net NPA, ROA and EPS of selected public sector banks. The study also analyses whether a higher amount of recapitalisation has a positive impact on bank performance. However, the study found no significant difference in performance of Nifty PSU stock index, NPA and EPS during the pre and post recapitalisation announcement (24th October 2017 and 24th January 2018). Thus, recapitalisation has potential to increase the return on assets in IDBI, SBI and PNB. The government and RBI must take essential policy and prevention measures to reduce the level of non- performing assets and increase the earning quality of the three banks.

Key Words

Recapitalisation, Nifty PSU, Earning per share, Net NPA, ROA.

Cite This Article

"Impact of Recapitalization on the performance of public sector banks. A study on IDBI, Sate Bank of India and Punjab National Bank.", International Journal of Emerging Technologies and Innovative Research (www.jetir.org | UGC and issn Approved), ISSN:2349-5162, Vol.6, Issue 6, page no. pp45-54, June-2019, Available at : http://www.jetir.org/papers/JETIRCK06006.pdf

Publication Details

Published Paper ID: JETIRCK06006
Registration ID: 204628
Published In: Volume 6 | Issue 6 | Year June-2019
DOI (Digital Object Identifier):
Page No: 45-54
ISSN Number: 2349-5162

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Cite This Article

"Impact of Recapitalization on the performance of public sector banks. A study on IDBI, Sate Bank of India and Punjab National Bank.", International Journal of Emerging Technologies and Innovative Research (www.jetir.org | UGC and issn Approved), ISSN:2349-5162, Vol.6, Issue 6, page no. pp45-54, June-2019, Available at : http://www.jetir.org/papers/JETIRCK06006.pdf




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