The government may not allocate funds towards bank capitalisation in the FY23 budget, a first in a decade. This comes as all state-run banks have turned profitable and the newly set up bad bank is expected to help free up capital for lenders. In FY22 budget, the government had set aside Rs 20,000 crore for bank capitalisation. "We do not foresee any capital requirement for lenders going forward. They all have plans to raise capital from the markets," said a government official, adding that this year allocation will be done by the end of March. "As the economy recovers, we don't expect bad loans to rise substantially putting a pressure on PSBs financials," he said adding that the government is, however, committed towards our banks and will provide them support if needed. The buoyant capital markets are expected to make capital raising easier.