Rs 2.11 lakh crore for PSU banks |
India has unveiled an ambitious plan to infuse Rs 2.11 lakh crore capital over the next two years into public sector banks (PSBs)saddled with high, non-performing assets and facing the prospect of having to take haircuts on loans stuck in insolvency proceedings. The move is vital for the slowing economy, as private investments remain elusive in the face of the “twin-balance sheet problem” afflicting corporate India and public sector banks reflected in slow bank credit growth. The recapitalisation of banks will help lend more freely and revive private investment, which is critical for revitalising India`s growth momentum at a time when the global economy is recovering. Financial Services Secretary Rajiv Kumar said the Government has decided to take a massive step to capitalise PSBs in a front-loaded manner, to support credit growth and job creation.
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