NEW DELHI: ‘Indradhanush’, the central government’s scheme announced in August 2015 to revamp public-sector banks, is set to be rejigged and re-launched.
The new roadmap, to be called Indradhanush 2, will have a comprehensive plan for recapitalisation public-sector lenders, with a view to making sure they remain solvent and fully compliant with the global capital adequacy norms, Basel-III. ‘Indradhanush 2.0’ will be finalised after the completion of the Asset Quality Review (AQR) by the Reserve Bank, which is likely to be completed by March-end.
The Reserve Bank of India (RBI) had embarked on the AQR exercise from December 2015 and asked banks to recognise some top defaulting accounts as non-performing assets (NPAs) and make adequate provisions for them. It has had a debilitating impact on banks’ numbers and their stocks. The central bank has set a deadline of March 2017 to complete the AQR exercise.
“Post Asset Quality Review (AQR) exercise by the RBI to clean up the balance sheets of PSBs, the numbers are being re-looked at and a revised programme of capitalisation will be issued as part of ‘Indradhanush 2.0,” said a finance ministry document.
Under the Indradhanush roadmap announced in 2015, the government had announced it would infuse `70,000 crore in state-run banks over four years, while they will have to raise a further `1.1 lakh crore from the markets to meet their capital requirement in line with global risk norms, known as Basel-III.