Former RBI governor C Rangarajan says banks recapitalisation should be done through cash

Former RBI governor C Rangarajan on Friday suggested that recapitalisation of banks should be done through by infusing cash rather than issuing Bonds, as he cautioned that Boards of public sector undertakings, including banks, should maintain “arms length” from the Government Hyderabad: Former RBI governor C Rangarajan on Friday suggested that recapitalisation of banks should be done through by infusing cash rather than issuing Bonds, as he cautioned that Boards of public sector undertakings, including banks, should maintain “arms length” from the Government. Rangarajan comments assume significance as Finance minister Nirmala Sitharaman, in August, announced upfront capital infusion of Rs 70,000 crore into public sector banks, a move aimed at boosting lending and improving liquidity situation. At the inaugural session of the seminar ‘Non-Performing Assets and its Resolution in Indian Banks’ at ICFAI Foundation for Higher Education,he, however, said the centre has infused Rs two lakh crore as capital into various banks during the past three years and it would be difficult for any dispensation to pump in so much as capital in cash form. Hoping that the growth may pick up next year onwards, the former Chairman of the Prime Minister’s Economic Advisory Council said it would take another eight years for India to become $5 trillion economy as opposed to Prime Minister Narendra Modi’s target of 2025, due to the muted growth now.