Till now, this avenue for dud asset resolutions was available only with scheduled commercial banks and select non-bank finance companies, Das said, adding that comprehensive guidelines on the same will be released soon.

With the liquidity surplus currently at around ₹2 lakh crore, the overnight call money rate has remained on the lower side, driving down banks' cost of funds.

Most economists in a Bloomberg survey expect expect the monetary policy committee (MPC) of the RBI to retain “withdrawal of accommodation” stance despite a fall in consumer inflation.

"The guarantee is a big issue no doubt but the fact of the matter is that NARCL has taken too long to conduct due diligence and make concrete offers," said a person familiar with the matter. "And even when they have made offers, those have been too little for banks to take a call which has meant an unecessary back and forth. All these factors have jeapordised the NARCL idea."

Large corporates will never be allowed to open a bank in India, veteran banker N Vaghul has said. Vaghul said India has learnt from its pre-bank nationalisation experience and will never repeat the same mistakes by allowing large corporations into banking.

A senior official told ET that the government has asked public sector banks (PSBs) to focus on written-off loans and try to recover at least ₹2 lakh crore in this financial year.

Uday Kotak, the CEO of Kotak Mahindra Bank, clarified his earlier statement regarding the US dollar as the "biggest financial terrorist in the world" on Twitter. He said he meant that the US dollar's reserve currency status gives it disproportionate power that can regulate global trade, putting other countries in a position of dependency when transacting. Kotak urged India to build strong independent institutions & frameworks as prerequisites to make the Rupee a reserve currency

Since the announcement of Uday Kotak as a non-executive director on the board, some concerns were raised about whether this will get the regulatory nod because, in its April 2021 circular, the RBI also makes it clear that there should be a three-year cool-off period before an MD and CEO is reappointed.