Budget 2016: More bank reforms likely, finmin to go beyond bank recap plans

Budget 2016 will focus on bank reforms that are likely to go beyond PSU bank recapitalisation plans, sources say. 

The finance ministry and the Reserve Bank of India are unhappy with public sector banks for not dealing with 'bad promoters' and have asked them to use corporate debt restructuring (CDR), strategic debt restructuring (SDR) and sell 'bad' promoters' assets to bring them to task. The RBI and finmin plan to ask PSBs for clear timelines on recovery from bad accounts.

Additionally, the finmin and RBI governor Raghuram Rajan are likely to take PSBs to task in Gyan Sangam meet, which is scheduled in March first week.

The finance ministry is also likely to push the Bankruptcy Bill as it cannot afford to lose more time. The government has already tabled Bankruptcy Bill in the Lok Sabha in the winter session.