Reserve Bank made a strong case for providing more capital to public sector banks to deal with the problem of stressed assets and get back to a position from where they can start generating internal accruals.
“Indian banks got into stress before implementation of Basel III and revised IFRS which provide protection against system level we have to find more capital for supporting banks today. Of course government of India has supported entire AQR (asset quality review) exercise that we have done,” RBI Deputy Governor N.S. Vishwanathan said.
“The government has been supportive and they have provided requisite capital for the public sector banks. We need to ensure that stressed asset build-up is contained so that banks get back to generate adequate internal accruals,” he said.
Mr. Vishwanathan also said that provision coverage ratio (PCR) has witnessed a decline in the last few months. — PTI