Know The Now – PSU Banks – Paradigm Shift Or Hype

Public sector banks have traditionally accounted for roughly 70% of total deposits, and PSU banks play a dominant role in extending loans and collecting deposits, particularly in rural areas. By 2016, a large number of projects had begun encountering severe stress. PSU banks were reticent to recognize these loans as non-performing. Balance sheets were stressed and it was starting to look inevitable that PSUs would not have adequate capital to cover the non-performing assets on the books.