How about a rescue fund for firms?

05 Nov 2020

The economy is going through a historically unprecedented shock. Government needs to provide additional capital infusion in a timely manner to public sector banks so that they are able to respond promptly with confidence to the needs of their customers. After recovery, further write downs by banks may be unavoidable as all enterprises may not be in a position to fully repay their outstanding loans. A rational considered decision firm by firm would need to be taken. An assessment can be then be made of the feasible repaying capacity by extending the period of the loan and taking haircuts. In some cases bankruptcy proceedings may also be unavoidable. Banks would need to take difficult decisions. Confidence to take commercial decisions with higher levels of uncertainty would be essential.

Tags
Resource efficiency
Economy
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