Bank recapitalisation to help get back economy on growth path: Nirmal Jain

The government on Tuesday announced Rs 2.11 lakh crore recapitalisation plan for public sector banks spread over two years in a bid to shore up their finances, boost private investment and revive the economy.

Nirmal Jain, Chairman, IIFL said it’s a very positive, bold and timely move from the government because till now the recapitalization has never been adequate, and since it is well documented that banks need Rs 2,40,000 crore and government  has provided for almost entire sum.

However, there needs to be further clarity on bonds and coupon rate tenure but this could help banks clean their balance sheets and post that started lending more and see revival of private sector investment come back.

Also required is autonomy and consolidation of banks from longer-term point of view, so that these things don’t reoccur, said IILF.

All this could also help economy get back on growth path, he said.
He also talks about how all this also help revival in industries like steel, cement etc.

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