PSB recap: Now what?

For recapitalisation to be a momentous step, we must see further reform of the HR and governance structure of the public sector banks

The government managed a moment of shock and awe with the recently announced plan to recapitalise public sector banks (PSBs). The sheer size of the recap, at Rs 2,11,000 crore, to be disbursed within two years was unprecedented. The announcement was unexpected both in terms of timing and scale. The markets gave the move a big thumbs up, taking the PSB stocks up by 30-40 per cent in a matter of a few hours. Many global investment banks are now falling over themselves in rushing to upgrade the sector. Many analysts are calling this the second most significant reform of