Sajid Chinoy of JP Morgan | Asia Pacific Emerging Markets Research In the wake of growing stress in the banking sector, and the need for banks to have greater visibility of capital as they undergo the resolution process through the new bankruptcy law, the government announced a bold package to recapitalize public sector banks to the tune of Rs2.11 trillion (equivalent to about 1.3% of 2017-18 GDP) over the next two years (fiscal years 2017-18 and 2018-19). The package has three components: two old and one new. First, under the previous Indradhanush recapitalization plan, the government had committed to infusing Rs700 billion from the budget over four years. Of that, authorities have already infused capital worth Rs520 billion over the last two years. Therefore, they remain committed to infusing the remaining Rs180 billion over the next two years. That was always part of the plan, and therefore not a surprise. Second, also under Indradhanush, banks were expected to raise Rs1.1 trillion