MUMBAI: The government and RBI want to make a clean break of the $150-billion non-performing assets (NPA) mess and are working on a timetable to put PSBs back on the recovery path. The past few quarters have seen lenders making steep provisions, incurring severe losses.
To make up for the lost capital, the government announced a massive Rs 2.11 lakh crore recapitalisation plan, but the worst isn’t over. For banks to access the government dole, they have to first meet performance criteria. RBI is imposing Prompt Corrective Action on banks with weak financial indicators and where capital and asset quality thresholds are found to be breached.