Project Sashakt: PSBs will need Rs 1.3 trn to tackle bad loans, says panel

Capital worth about Rs 500 billion will be required for PSBs to invest in alternative investment funds

Public sector banks (PSBs) will need an additional capital of Rs 1.1-1.3 trillion over the next two years to implement a five-point strategy to tackle bad loans, a committee report on project ‘Sashakt’ has stated.

Among demands made to the government for implementing the Sashakt plan, the committee of bankers, led by Punjab National Bank (PNB) chairman Sunil Mehta, has sought additional capital that will be required in a phased manner “to provide for upfront haircut and growth capital over a period of two years”. The committee suggested some PSBs are undercapitalised and may require heavy capital infusion to sustain.“PSBs will