RBI, Centre see leap in economy

Finance ministry is working on structure of recapitalisation bonds, announcements likely over next few weeks

Reserve Bank of India (RBI) Governor Urjit Patel on Wednesday hailed the government’s bank recapitalisation plan, terming it a “monumental step forward in safeguarding the country’s economic future”. 

Analysts said the plan could boost credit growth by 10 percentage points over the next 12 months.

In an unusual communique on the central bank’s website early in the day, Patel said the plan would front-load capital injection while staggering the attendant fiscal implications over a period of time. “As such, the recapitalisation bonds will be liquidity neutral for the government except for the interest expense that will contribute to the annual