Is the worst over for banks in terms of bad debts?

In the past two months, there has been a distinct increase in the amount of political attention and action to key sectors that have plagued the banking system with bad debt. The power sector is being looked into both coal import and mined quantum of coal is likely to increase; the government has decided to guarantee the Air India bonds and there are no fresh scams.

More importantly, interest rates may have peaked. N Seshadri, executive director of Bank of India and Pawan Agrawal of CRISIL ratings share their views on the sector and its problems. N Seshadri of Bank of India believes that the pressure on liquidity still remains and there is definitely a lag effect in terms of lesser capacity getting utilized and a possible slowdown in capital expenditure. Furthermore, while Seshadri doesn