CAG doubts PSBs’ ability to raise funds

The Comptroller & Auditor General of India (CAG) on Friday expressed doubts over the ability of the public sectors banks (PSBs) to raise money from the market. 
 
The CAG on Friday presented its analysis of 17 public sector banks in the parliament, according to which PSBs have a market value lower than book value, which makes it difficult for them to raise additional capital from the markets.
 
It is estimated by the government, as per the Indradhanush plan, that PSBs would raise Rs 1.1 lakh crore over 2015-19 in order to meet their capital requirements. However, only Rs 7,726 crore was raised by the public sector lenders during January 2015 - March 2017.
 
The report revealed that out of 17 banks, 12 banks displayed a divergence of at least 15% between NPAs reported by them and the estimates of the Reserve Bank of India and there was also a difference in estimates of net profits of these 12 banks. 
 
The highest divergence was shown by Bank of Maharashtra at Rs 3,333 crore, followed by Corporation Bank at Rs 1,953 crore.