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Putting Funds into Indian Banks Not a Solution for Debt Issues: RBI
May 25, 2017
Infusing new funds into the Indian banks won’t make the problem of stressed assets go away, central bank Deputy Governor Viral Acharya said in a speech in Kolkata on Friday. He added that while the banks would very much like to lend there is no demand as the corporates are already in huge debt.
According to Viral, the government needs to fix the underlying debt problems of the corporations first. Only then the demand for credit could be increased.
The problem of stressed assets has increased considerably in the past few years, as bad loans have increased by 17%. To tackle this RBI has been taking several measures such as merging weaker banks or imposing restrictions on them until they show improvements.
