Bank recapitalisation is a necessary but not sufficient condition for turning around the health of banks, said former Reserve Bank of India Deputy Governor H.R. Khan.
“While there is no harm in recapitalising public sector banks, the full features of the move are being awaited,” he said, while speaking at the Conclave on Mapping Financial Market with the Future Economy.
SBI deputy managing director Neeraj Vyas said that consolidation would happen in the banking industry and ‘everybody’ was ‘bullish’ on the move. “If you set aside 50% of the capital infusion for provisions, the rest could go towards giving the bank balance sheets a fillip,” he said, adding a positive sentiment had been created, which will reflect in the health of banks as well as future credit growth.
To a query on SBI’s expectation from the capital infusion, Mr. Vyas said while SBI was a healthy bank, it was up to the government to decide on this.
He said post SBI family merger, the bank was now one-quarter of the Indian banking industry and among the world’s 50 largest banks.
He said financial inclusion had brought 28 crore new accounts into the system, of which 13 crore were in SBI.
