Govt to work on a recap plan after evaluating the impact of moratorium

For now, the government has told state-owned banks to raise money from the markets

The Centre will draw the final contours of state-owned banks’ recapitalisation in the second half of the current fiscal year after ascertaining how lifting of the moratorium on loan repayment impacts the balance sheet of lenders.

“It’s somewhat early to evaluate the recapitalisation requirements of public sector banks (PSBs). The moratorium imposed by the regulator is still in place. The real impact on the lenders’ books will be palpable after it ends. We will have to see how much of these loans potentially turn into non-performing assets (NPAs),” said a top government official.

The Reserve Bank of India (RBI) had