The combination of excess lending with an obvious failure to adhere to fundamental and sound risk management standards not only produced significant losses in mortgage portfolios; it also tainted an asset type that was key in the broader securitisation and credit distribution process. The reckless use of the originate-to-distribute model increased uncertainty regarding credit quality, where risk resides and the impact of deterioration.
Approximately, as high a sum of ₹ lakh crore in Tier 1 capital (which includes ₹ 2.40 lakh crore equity capital) will be needed. Recently, it has been reported that the GOI is contemplating scaling down their holdings in PSBs to 52%.