As the economic stress due to the pandemic deepens, banking is surely going to be one of the most affected sectors, due to heightened default in payments One element often discussed in this context is the new arrangements that SEBI and the RBI are making to ease the pressure on the banking system Many banking and economic experts are salivating at the prospect of the government releasing more fiscal stimulus into the economy through various methods like printing more money or by borrowing. However, this may not be a good idea.
For the government to borrow, the market should have savings. The available data show that savings of the domestic households have taken a hit since March end and are not enough to fund governments borrowing. It i…
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