PSU banks' recapitalisation challenging, say analysts

Acharya's suggestions on the issue are good, how to go about these is the problem, say stakeholders

Reserve Bank of India (RBI) deputy governor Viral Acharya's urgings on the capitalisation need of public sector banks (PSBs) are fine but implementation is the challenge, say analysts and rating agency executives.

PSBs are saddled with a huge load of loans gone or going sour, with correspondingly high provisioning requirements on their balance sheet. On Thursday, Acharya posed a number of questions, as a way of suggesting that these be incorporated in a new plan for recapitalising and nursing back the PSBs to health, in a post- loan resolution period.

Among his suggestions were asking banks to access the market