Letter to BS: Economic slowdown hits debt-servicing capacity of borrowers

This refers to “PSU banks not out of the woods yet” (Febraury 17). The strategy of improving the quality of the assets and bringing down the elevated level of the bad loans in the public sector banks (PSBs) is not adequate. As a consequence, the PSBs are losing business, market capitalisation and credibility. The debt-servicing capacity of the borrowers is getting badly affected by the slowdown in the economy. Since income generation from economic activities and jobs is crucial to the recovery of bad loans, focusing simply on the effectiveness of the recovery tools will hardly make a difference.

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