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Recapitalisation funds to take a while before accelerating credit growth

Bulk of the recap funds to banks will go towards provisioning, and it will take time before it leads to acceleration of credit growth

Recapitalisation funds to take a while before accelerating credit growth
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Namrata AcharyaAbhijit LeleRaghu Mohan
North Block’s infusion of an additional Rs 48,239 crore in state-run banks last week brought the curtains down on a 2-year recapitalisation plan set in motion in October 2017; it adds up to a tidy Rs 1.96 trillion. You have fuel in the tanks for sure, but is it a journey towards a mirage?

At the first glance, it may appear the credit pipeline will unclog as a few banks under the prompt corrective action (PCA) framework breathe easy — they collectively account for nearly 20 per cent of the systemic credit. But’s what’s more likely to happen is that a

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First Published: Feb 27 2019 | 11:27 PM IST

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