PSB Recapitalisation: An effort worth making if played to strength

Credit offtake remains healthy in housing, small businesses and agri loans, which is also the forte of public sector banks

The often spoken point on recapitalisation of public sector banks (PSBs) is that even their combined market capitalisation will be far less as compared to the money pumped in these state-owned banks since October 2017.
 
However, the hope is that this time the Rs 70,000 crore anticipated to be infused into PSBs may yield positive outcomes, given the finance minister’s reiteration that this round of capital would be towards growth. This along with a receipt of over a trillion rupees by the government from the Reserve Bank of India lifted the CNX Nifty PSU Bank index up by 2.5