Uncertainty in the Future – PSU Banks

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  • PSU Banks are reeling under the pressure of huge NPAs.
  • Union Government has announced recapitalization of Rs.2.11 Lakh Crores in the current financial year of which budgetary support of Rs.76 thousand Crores and Rs.1.35 Lakh Crores of Recapitalization Bonds.
  • Whether these recapitalization is enough for Basel III norms of the Banks even for 2019?
  • Will the Banks be able to raise capital from market without the support of Life Insurance of India?
  • But will these measures be enough to make these Banks strong enough after 2019?
  • Can the measures taken by RBI and the Union Government for recovery of NPAs be enough?
  • Will the next step of the Union Government be consolidation of the Banks to make 21 PSU Banks to 7-8 Banks?
  • Will these Banks become self-sufficient ever or work like parasites of the capital infusion of the Government of India?
  • Will surge of NPA continue or will there be financial discipline?
  • Will the Banks’ consolidation plan make Banks stronger or privatization be the other alternative for these Banks?
  • Will there be a stop on the political interference to meet the vote Bank politics in the state of affairs of the Banks like loan remissions etc.?

These are certain unanswered questions making the future of PSU Banks uncertain.

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