Union Government has decided to launch ‘Indradhanush 2.0’ for recapitalisation of public sector lenders so that the banks remain solvent and fully comply with the global capital adequacy norms namely Basel-III.
The Indradhanush 2.0 programme will be finalised by Reserve Bank of India (RBI) after completion of Asset Quality Review (AQR) being undertaken and is likely to be completed by end of March 2017.
Asset Quality Review is being undertaken to recognize the top defaulting accounts as Non-Performing Assets (NPA) and make adequate provisions for them as they have negative impact on banks and their stocks. Post AQR, revised programme of capitalisation will be also issued as part of ‘Indradhanush 2.0.
Earlier in 2015, under Indradhanush roadmap, the government had announced to infuse Rs 70,000 crore for recapitalization in state-run banks over four years while the banks had to raise a further Rs 1.1 lakh crore from the markets to meet their capital requirement in line with global risk norms known as Basel-III. So, let’s discuss some questions related to this post:
Q1. What is the full form of AQR?
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Source- The Hindu