Letter to BS: Panel wants easy capital adequacy norms for PSBs

This refers to the report “Panel wants easy capital adequacy norms for PSBs” (September 7). The State-owned banks are incurring losses and hence facing the threat of losing credibility. It is a well-known fact that the diminishing or negative returns that banks are manifesting are due to the slow resolution of the stressed and bad assets, and it is affecting the banking sector and the whole economy. The topmost priority for the banks should be a swift resolution and recovery of the bad assets and improving the quality of the loans and advances. 

Remission in the capital requirements, to the extent possible, would enable the banks to expand their loan book, profitability and related financial ratios. This support will help those banks which are under a prompt corrective action plan to deliver better results.

V S K Pillai, Kottayam

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