There is general agreement that tepid growth in bank credit has been a major obstacle to launching the economy into a 8% plus growth trajectory. Bringing credit growth back on track in turn requires restoration of the health of Public Sector Banks (PSBs). For example, at 5.7%, credit growth in 1993-94 was more than 3 percentage points lower. On the contrary, two worrying features of credit growth in recent years must be highlighted. Once markets recognise the government’s resolve to restore the health of the banks, value of bank equity would rise.

Source: Times of India October 22, 2017 20:46 UTC