Since non-performing assets in the banking system are expected to rise due to the Covid-related disruptions, the government will be expected to make adequate allocation for capital infusion in PSBs. But doing so would not be easy because of other pressing needs in the economy. Thus, the government should do more than just infusing capital in PSBs to make them sustainable in the long run. In this context, the idea of a Bank Investment Company (BIC), which the government may introduce in the Budget, would be a step in the right direction. The top edit explains why here.
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