37: India's banks want capital. Who will succeed in getting it?

The lockdown imposed to curb the spread of COVID-19 pandemic has meant that borrowers are unable to repay their loan instalments on time. Banks have given a six months moratorium but now the fear is that even after the moratorium is over, borrowers won’t be able to start paying their EMIs. To absorb such losses, banks need capital. Credit Suisse estimates that Indian banks need $20 billion capital to absorb these losses. Public sector banks are in a far worse position to raise capital. Unlike private sector banks, going to the market to raise money won’t get them much.