No free lunch

Recapitalisation of PSBs must be linked to efficiency

Reserve Bank of India (RBI) Governor Urjit Patel said over the weekend that the central bank and the government were discussing the question of whether the problem of capital provisioning of public sector banks (PSBs) could be addressed in a time-bound manner. It is wise that the RBI, as the sector’s regulator, and the government, as the principal shareholder of these banks, are in communication on the problem, and that the RBI governor is concerned enough to discuss the question of time-bound capitalisation of the banks in public. The gross non-performing assets (NPAs) of the banking system stood at almost