This is, in a way, an extension of the recapitalisation plan that was to end this financial year (April 2019 to March 2020, of FY20)
Besides, uncertainty over the capital infusion proposal for the public sector banks (PSBs) under the upcoming Union Budget for 2020-21 has also soured investor sentiment.
Indira Gandhi's brilliance as a politician lay in her ability to transform the most sordid political intrigue into high ideological disputation
According to him, the mode of recapitalisation that is being done now is through the issue of bond
A significant portion of the capital provided would be tied up in boosting core capital and provisioning against bad debts which would limit the ability of bankers to lend
The move is expected to generate an additional lending and liquidity in the financial system to the tune of Rs 5 lakh crore, she said at a press conference
Acharya's boss at the central bank, Shaktikanta Das, says a continuous and prolonged dependence on the government's capital infusion into banks can breed inefficiency
The nationalised banks do a good job of what their majority owner mandates them to, but most are failed business enterprises
Recap will help, but PSBs need wider reforms
This would enhance the total recapitalisation in the current fiscal from Rs 650 billion to Rs 1.06 trillion