“It’s high time for the Indian government to decide, whether it will put more money in public sector banks or instead decide something strategic for these lenders plagued”, says vice chairman of Kotak Mahindra Bank in the Bank’s annual report.
While writing the letter to the shareholders Uday Kotak said, “The time has now come to bite the bullet. The state, sooner or later, may have to make the difficult choice between putting in more good (taxpayers) money after bad or being open to ‘strategic’ choices. I wonder whether that can happen now or sometime after 2019”.
Indian banking industry is largely dominated by the public sector banks. It has about Rs 12 lakh crore stressed loan including bad loans and restructured loans. In the last quarter of last fiscal, bad loans in the banking sector crossed Rs 7 lakh crore. While private sector banks like Kotak Mahindra have very few infrastructure loans.