Daily Current Affairs 2021 Country paying recap, banks can't get easy money: Government | Daily Current Affairs 2021

Country paying recap, banks can’t get easy money: Government

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It is the Indian taxpayer who will foot the bill for the banks’ recent recapitalisation plan and the state-run lenders cannot expect to get easy money in this manner, the government said on Sunday.
Briefing reporters following the “PSB Manthan” brainstorming event of Finance Minister ArunJaitley with senior officials of public sector banks (PSBs) and financial institutions, Financial Services Secretary Rajiv Kumar said.
The government had decided to put in more capital from the Budget, through bonds and banks’ equity expansion and it is, thus, the country which is virtually going to pay to keep the banking system in good health.
“Everything is linked to the reforms which each board will consider within a short time as to what kind of business and how they want to go ahead. Its not easy money which is going to come, that is the main point. It has to be followed with a whole lot of reforms,” Kumar said.
In a stimulus package aimed to boost flagging economic growth, create jobs and increase credit flow, the cabinet last month approved a Rs 2.11 lakh crorerecapitalisation plan for state-run banks and massive road infrastructure investment of nearly Rs 7 lakh crore over five years.
Of the support to banks, Rs 1.35 lakh crore will be raised through recapitalisation bonds and the remaining sum through budgetary support and market borrowings.
Kumar said the reforms also include bank boards coming up with a clear plan on consolidation. He also said the Rs 1.35-lakh crorerecapitalisation bonds will be “front-loaded”, that is most of it would happen in the current fiscal and the contours of the bonds are being decided by the Finance Minister.
Kumar added that Sunday’s discussions centredaround reforms, including strengthening of bank boards and resolution of non-performing assets (NPAs), or bad loans. Accumulated NPAs of state-run banks have increased to Rs 7.33 lakh crore as at the end of June 2017.

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