INDRADHANUSH 2.0 ON CARDS FOR RECAPITALISATION OF PSU BANKS

The government plans to come out with Indradhanush 2.0, a comprehensive plan for recapitalisation of public sector lenders, to make sure they remain solvent and fully comply with the global capital adequacy, or Basel-III, norms. Indradhanush 2.0 will be finalised after completion of the asset quality review (AQR) by the Reserve Bank, which is likely to be completed by March-end, according to a finance ministry document. The RBI had embarked on the AQR exercise from December 2015 and asked banks to recognise some top defaulting accounts as non-performing assets (NPAs) and make adequate provisions for them. The central bank has set a deadline of March 2017 to complete the AQR exercise. Under Indradhanush roadmap announced in 2015, the government had announced its decision to infuse ₹70,000 crore in state-run banks over four years.