What is public sector bank recapitalization? plagiarism. Get a tailor-made essay on “Why Violent Video Games Should Not Be Banned”? Get the original essay Recapitalization is described as a strategy to improve one's financial basis to overcome a difficult financial situation or improve one's financial health. The recent issuance of recapitalization bonds by the government is a proactive step in the development of the economy. Recapitalization has been very successful in many countries and in India in the past. The recapitalization of banks is an essential step for the jurisdiction of public funds. The benefits of such an exercise are difficult to quantify because they make it possible to avoid disruptive effects of a qualitative nature. The recapitalization was necessary because utilities are facing financial problems and need money amid rising bad debts. The three good reasons justifying the recapitalization of the PSBS are as follows: a. The increase in the volume of doubtful assets has led to an erosion of capital. Basel III capital standards require higher capital in banks. The expansion of credit needs in the economy can only be met with higher capital. The government announced a major recapitalization campaign on October 24, 2017 using three channels: the budget, market borrowing and the issuance of recapitalization bonds. The Rs. 1,350 billion budget is more than sufficient according to estimates from the Ministry of Finance. The latest figures put the increase in non-performing assets (NPAs) between FY 2015 and June 2017 at Rs. 4.55 trillion. The increase in provisions during the period 2014-15 to 2017-18 is pegged at Rs. 3.79 billion. Thus, the recapitalization of the banking sector to the tune of Rs. 2,110 billion seems sufficient to resolve the problem of stressed assets. Moreover, after provision for doubtful assets and on a conservative basis, even if 50% remains as residual for banks' growth capital, the multiplier impact could be significant. The latest recapitalization effort will rejuvenate the banking sector. This will help banks extend fresh credit and resolve the problem of stressed assets to some extent. At the same time, it is not indiscriminate since the banks themselves must commit to taking measures to improve their performance by signing a memorandum of understanding with the government. BJP leader Amit Shah termed the government's announcement of Rs 2.11 trillion for bank recapitalization as "historic" and said it would not do so. only give a boost to businesses, but also provide jobs for young people. Keep in mind: this is just a sample. Get a personalized document from our expert writers now. Get a personalized essay. Ultimately, this recapitalization will lead to an improvement in the government's finances as it would be able to sell its stake in public sector banks at much higher valuations (the market capitalization increased to Rs 1.2 trillion in a single day). Even on the demand side, some banks that were not investing their extra cash in debt securities due to a lack of capital could now do so instead of placing it in the Reserve Bank's reverse repurchase operations. of India..

Essay / What is public sector bank recapitalization? plagiarism. Get a tailor-made essay on “Why Violent Video Games Should Not Be Banned”? Get the original essay Recapitalization is described as a strategy to improve one's financial basis to overcome a difficult financial situation or improve one's financial health. The recent issuance of recapitalization bonds by the government is a proactive step in the development of the economy. Recapitalization has been very successful in many countries and in India in the past. The recapitalization of banks is an essential step for the jurisdiction of public funds. The benefits of such an exercise are difficult to quantify because they make it possible to avoid disruptive effects of a qualitative nature. The recapitalization was necessary because utilities are facing financial problems and need money amid rising bad debts. The three good reasons justifying the recapitalization of the PSBS are as follows: a. The increase in the volume of doubtful assets has led to an erosion of capital. Basel III capital standards require higher capital in banks. The expansion of credit needs in the economy can only be met with higher capital. The government announced a major recapitalization campaign on October 24, 2017 using three channels: the budget, market borrowing and the issuance of recapitalization bonds. The Rs. 1,350 billion budget is more than sufficient according to estimates from the Ministry of Finance. The latest figures put the increase in non-performing assets (NPAs) between FY 2015 and June 2017 at Rs. 4.55 trillion. The increase in provisions during the period 2014-15 to 2017-18 is pegged at Rs. 3.79 billion. Thus, the recapitalization of the banking sector to the tune of Rs. 2,110 billion seems sufficient to resolve the problem of stressed assets. Moreover, after provision for doubtful assets and on a conservative basis, even if 50% remains as residual for banks' growth capital, the multiplier impact could be significant. The latest recapitalization effort will rejuvenate the banking sector. This will help banks extend fresh credit and resolve the problem of stressed assets to some extent. At the same time, it is not indiscriminate since the banks themselves must commit to taking measures to improve their performance by signing a memorandum of understanding with the government. BJP leader Amit Shah termed the government's announcement of Rs 2.11 trillion for bank recapitalization as "historic" and said it would not do so. only give a boost to businesses, but also provide jobs for young people. Keep in mind: this is just a sample. Get a personalized document from our expert writers now. Get a personalized essay. Ultimately, this recapitalization will lead to an improvement in the government's finances as it would be able to sell its stake in public sector banks at much higher valuations (the market capitalization increased to Rs 1.2 trillion in a single day). Even on the demand side, some banks that were not investing their extra cash in debt securities due to a lack of capital could now do so instead of placing it in the Reserve Bank's reverse repurchase operations. of India..

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