Banks recapitalization to improve health of banks

New Delhi Feb 10: Union Finance Minister has today justified the recapitalization of banks and has said that "the government's move to recapitalize public sector banks (PSB) would improve their lending capacity."

He added that "I think the indications are that it [credit offtake] is already happening and that seems to be a good sign and now with the recapitalization of the banks, the capacity itself to lend will improve."

"I had a meeting with the SEBI's [Securities and Exchange Board of India's] board, and one of the factors that stood out in their presentation was that there is now also increased reliance on the bonds market as far as credit is concerned," he added

Earlier the government had announced a mega recapitalization of Rs 2.11 Cr to improve the health of the bank.