Letters: Capital is key

Without need-based infusion of capital, government-owned banks wouldn't be able to lend

The editorial, “No free lunch” (August 22) is relevant. It is not wise to expect government-owned banks to function and deliver better results without adequate capital. Crucial sectors of the economy, which have borrowed sizeable amounts from these banks, have fared miserably in liquidating their dues. As a consequence of the ineffectiveness of economic policies, crucial sectors have recorded a dismal performance.
 
This itself, and the deliberate diversion of bank credit by unscrupulous borrowers, have contributed to the current mountain of bad loans. Although rapid resolution of bad loans is crucial, the progress in doing so by banks is