Context: India can fix its public-sector lenders by letting them raise enough equity capital to significantly reduce government control.
Key Concerns in the banking sector:
Issues with the privatization of PSBs: as recommended by an RBI internal working group (IWG)
Issue with the recapitalization of PSB’s: worth some Rs 2.5 trillion using partly taxpayer’s money and partly recapitalization bonds, including the discounted zero-coupon bonds sold to PSBs.
Way forward: