Implications of recapitalisation bonds: Govt changes gear on fiscal consolidation

Will the government go in for ownership change in the state-owned banks? Will the managements be revamped in a way that such bad loans problems do not recur?

A few days after Diwali last year, India’s banks were tearing their hair out as they struggled to manage long queues of people and replace old currency notes of Rs 500 and Rs 1000 in the wake of demonetisation. 
 

This Diwali was different, particularly for the public-sector banks.
 

Less than a week after the festival, they heaved a sigh of relief, though for a different reason. On Tuesday, October 24, the government announced a grand plan: Public sector banks will be recapitalised to the tune of Rs 2.11 lakh crore over the next two years. 
 

This amount may be a