Government plans to come out with 'Indradhanush 2.0', a comprehensive plan for recapitalisation of public sector lenders, with a view to make sure they remain solvent and fully comply with the global capital adequacy norms, Basel-III. '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.
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. It has had a debilitating impact on banks' numbers and their stocks. The central bank has set a deadline of March 2017 to complete the AQR exercise. "Post Asset Quality Review (AQR) exercise by the RBI to clean up the balance sheets of PSBs, the numbers are being re-looked at and a revised programme of capitalisation will be issued as part of 'Indradhanush 2.0'," said a Finance Ministry document.