Context: The resilience of the Indian banking sector during the last year shows that the government should review its plan for sale and privatization of Public Sector Banks (PSBs).
Positive indicators in the Banking Sector:
Issues with the recapitalization of banks:
Issue with privatization: Shedding majority ownership in PSBs at one go could seriously jolt depositor and investor confidence and adversely impact growth in financial savings
Way forward: To deal with problems associated with PSBs
Conclusion: Government should not act in haste to deal with the problems of PSBs; rather, it should act with caution.