A top Finance Ministry official said on Saturday that additional capital infusion (over and above the Rs 14,000 crore sanctioned recently) into public sector banks will depend on their performance on the loans front, especially retail loans. Rajiv Takru, Secretary, Department of Financial Services, also ruled out tapping the World Bank for infusing capital into the public sector banks (PSBs). The observation on additional capital comes in the backdrop of the government wanting public sector banks (PSBs) to lend more to the retail – auto and housing – segment at cheaper rates. While banks have cut or waived the processing fee on retail loans for the ongoing festival season, they have held back from cutting lending rates. Reason: Banks are already lending at, or slightly above, their minimum lending rate, also known as the base rate.
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