July 11, 2017

NPAs, Non-Performing Actions and Systemic Risks to Public Monies

In this article published in the New India Express, Shankkar Aiyar, Visting Fellow at IDFC Institute, discusses the situation of NPAs and ways to recapitalise public sector banks in India. He notes, 


"The sane and safe option before the government is to issue fresh equity for retail investors and raise capital—price it at a discount, enable the people to bet on the Indian economy and let the gains accrue to the widest possible group. The issue of fresh equity will effectively bring down its holding in these banks and shore up capital adequacy. It should then create an India Reconstruction Bank—a special purpose vehicle to park bad assets as was done for UTI during Atal Bihari Vajpayee regime following the advise of Vijay Kelkar—and he should be consulted."


Read the complete article here

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