Recap Plan Will Enable State-Run Banks To Take Necessary Haircuts, Says HDFC’s Mistry

The government’s bank recapitalisation scheme will equip public sector lenders with the necessary “accounting capital” to write off some portion of the bad loans on their books, Keki Mistry, vice-chairman and chief executive officer at HDFC Ltd. told BloombergQuint in an interview.

As part of the insolvency resolution process, state-owned banks needed accounting capital to take a decision to cut down some of the bad loans they have given historically, Mistry said. He expects a resolution on most of the Reserve Bank of India-identified stressed accounts within the next 3-4 quarters.

Watch the full interview here.