After all, these investors have waited far too long and now wish to generate quick returns to meet the expectations of their own investors. All this is playing out to near perfection in our setting. Its consequences are pernicious.
At one end, public sector banks are running balance-sheets that seem to be in a perennial need of recapitalization from its principal owner, i.e., the government, and shying away from lending to potentially healthier industrial credits. Bank credit growth has been steadily declining at the stressed banks. Some private sector banks face such headwinds too.