Recapitalization of state-owned banks: Privatization should do it4 min read . Updated: 14 Jan 2021, 09:15 PM IST
India can fix its public-sector lenders by letting them raise enough equity capital to significantly reduce government control
As with the whole economy, the covid pandemic dealt a severe blow to India’s banking sector, which was already reeling under a huge burden of non-performing assets (NPAs). Stress tests reported in the Financial Stability Report (FSR) indicate that the low ratio of capital to risk-adjusted-assets (CRAR) is likely to decline further. To revive the economy and resume sustained high growth, bold structural reforms will have to be combined with strong fiscal and monetary measures.
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