Sunday, December 21, 2025 | 03:28 AM ISTहिंदी में पढें
Business Standard
Notification Icon
userprofile IconSearch

Options to de-stress public sector banks

The degrees of freedom available for govt's arbitrary decisions are circumscribed by financial market dynamics

bank, psb
premium

Y V Reddy
Several options are being considered to address the NPA problem of public sector banks, sometimes on a standalone basis and, sometimes in conjunction with other measures to solve the underlying issues that result in demand for capital infusion.
 
Consolidation of banks in public sector is an option, but that by itself does not increase capital or address weaknesses common to all banks being considered for consolidation. If the problem is governance, how does consolidation help? A bad loans bank was suggested but recourse was taken to this method in other countries to meet exogenous shock to banking system but
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper