Of recapitalisation and resolution of NPAs

Abstract

Even as bail-in won’t work in the Indian banking system, extra vigilance is called for to track the path of lending decisions. The Reserve Bank of India’s governor, Urjit Patel, interacting with the press on December 6, mentioned the Centre’s recapitalisation plan. He emphasised that the plan envisaged not only recapitalisation but reforms too; the reforms would be differentiated amongst public sector banks (PSBs).

PSBs that have managed their balance sheet well will have front-loading of recapitalisation bonds. The other banks will receive government support based on their resolve to undertake reforms in a time-bound manner. These reforms will be measured in terms of capacity of banks to become “slim and trim” and follow better focused business strategies, including sale of non-core assets. The Government is also considering governance reforms for all PSBs. Read more at: https://www.thehindubusinessline.com/opinion/of-recapitalisation-and-resolution-of-npas/article9992458.ece