Economic Survey 2018: Need complementary reforms to shrink unviable banks

Govt, RBI step up efforts to address issue

Addressing the twin balance-sheet (TBS) challenge through effective resolution of stressed assets and bank recapitalisation should remain on the top agenda of the government next year, said the Economic Survey report on Monday.

The TBS refers to stress in the balance sheets of companies and the resultant stress on the balance sheets of banks that had lent to these companies. The government and the Reserve Bank of India (RBI) have stepped up efforts to address the issue by recapitalising banks and forcing defaulting companies to undergo liquidation. However, liquidating firms and forcing the management to leave won’t be enough, the survey