Bank recap plan to help deal with bloated balance sheets: S&P

The government plans to infuse capital totalling Rs 2.11 lakh crore ($32.4 billion) into the banks. That's much larger than its previous infusions over the past few years.

This is around 35 per cent of the current Tier-1 capital of public sector banks.

"The government's proposed capital infusions step will help address the banks' bloated balance sheets, which are partly constraining the economy. We believe the government's efforts should enable banks to take necessary 'haircuts' on their corporate nonperforming assets," S&P Global Ratings credit analyst Amit Pandey said.