The biggest negative for India’s state-owned banks in the Union
budget is finance minister Arun Jaitley’s announcement that the government will
infuse (only) Rs.25,000 crore in fresh
capital in these banks—many of which are crumbling under the burden of bad
loans.
Expectations were running high ahead of the budget even as
analysts talked about trillions of rupees in capital to take care of the pile
of bad loans as well as meet the new Basel norms which will kick in from April
2019.
However, the expectations were exaggerated and the budget has
quite a few things that can bring cheer to the banking industry.