A Study on Recapitalisation with reference to Selected Public Sector Banks in India

Abstract

Abstract
            As the Government of India introduced capital infusion plan “Recapitalization of public sector banks under Indradhanush 2.0”, it becomes vital to assess its impact on the business environment.  This plan was finalised after Asset Quality review and it reduces the stress level of Reserve bank of India in processing the recapitalisation procedure. The objective of the study is to analyse the performance of recapitalisation in the Nifty PSU Bank Index before and after recapitalization.  The research study is further study extended to compare capital infusion amount with the NPA values of selected public sector bank using correlation.  It also attempts to find the relationship between NPA levels of PSB’s with Capital Adequacy Ratio of selected banks. The performance results in CBI, IDBI & PNB are found to have negative correlation with the NPA values. The recapitalization has a huge potential to revamp banks bad loans and it improves the earning quality of banks.  In order to improve the efficiency of recapitalisation, government and RBI take necessary policy reforms, frameworks and prevention measures to enhance the profitability of public sectors banks and economy growth of the country.This research clearly sketches the impact of recapitalisation on selected banks such as Bank of Baroda, Bank of India, Central bank of India, IDBI Bank, Punjab National Bank & State Bank of India.