Bad bank, good intentions and bad lending

If PSBs cannot lend as indiscriminately as they did last time in the name of "credit expansion", how well will these banks do?

After 10 years of stagnation, the stock market is again excited about the prospects of public sector banks (PSBs). Of course, only the stock of State Bank of India (SBI) has hit an all-time high, while most others are languishing far below their glory days of 2010-11. There are two reasons for this excitement: The launch of a “bad bank” and the possible expansion of credit, as the economy picks up. While it is true that both factors can theoretically make a big difference to the future of banks, it would help to learn some lessons from the past decade.