Taking advantage of the robust financial health of public-sector banks, the government has asked them to pay interim dividends, as part of efforts to contain fiscal deficit within 5.6 per cent of the GDP.

"We have written to all PSU banks to pay interim dividends in the third quarter of this fiscal. Last fiscal the banks paid about Rs 800 crore (Rs 8 billion) and we expect it to be more this fiscal in view of the robust performance," a finance ministry official said in New Delhi on Friday.

He said the performance of the banks was robust last fiscal with net profits growing by about 50 per cent and the trend was expected to continue this year also.

Moreover, the non-performing assets of the banks have come down significantly in the first half of this fiscal.

At least three PSU banks -- Dena Bank, Punjab & Sind Bank and Bank of Maharashtra -- also plan to tap the market to raise fresh capital.

Dena Bank plans its second public offer to raise about Rs 70-80 crore (Rs 700-800 million) while P&S Bank and Bank of Maharashtra were planning to raise about Rs 100 crore (Rs 1 billion) each through initial public offers this fiscal.

On P&S Bank, the official sought to allay fears of any irregularities in the bank and said the chairman N S Gujral had gone on 4-weeks leave from November 14 and the committee of directors was managing the bank right now.

The finance ministry did not rule out another buyback of government securities but the official said there was no such plan as of now.