Hope fades for PSBs

Govt cannot keep infusing capital perpetually

Public sector banks (PSBs) are reported to have written off about Rs 8 trillion worth of loans over the last seven years, which is more than twice the Rs 3.37 trillion capital infused by the government in the same period. Fiscal year 2018-19 witnessed the maximum write-offs at Rs 1.83 trillion. The last four years have been particularly bad for PSBs as they wrote off loans worth over Rs 1 trillion every year. This is clearly an unsustainable position, and the government cannot perpetually keep infusing large sums of capital into the banking system. It has been issuing recapitalisation bonds