Pursuit of growth : Learn Vocabulary (THE HINDU)

Pursuit of growth : Learn Vocabulary (THE HINDU)

The Centre’s decision to infuse ₹2.11 lakh crore of fresh capital into public sector banks over the next two years, through a blend of financial mechanisms, should help revive the growth momentum. Saddled with bad loans as well as stressed assets of close to ₹10 lakh crore, India’s banking sector has been naturally wary in recent quarters of extending fresh loans, as reflected in bank credit growth slipping to a 60-year low of just 5% this April. Since its first year in office, the government has been seized of what Chief Economic Adviser Arvind Subramanian calls the twin balance-sheet problem. If over-leveraged companies are unable to invest or borrow afresh, and banks are unwilling or/and unable to finance fresh investments, a private investment-led recovery is unlikely. However, it was only late last year that a new bankruptcy law was introduced, and over the course of this year the Reserve Bank of India has asked banks to invoke insolvency proceedings in the case of 50-odd accounts if settlements remain elusive. Banks, under pressure from the RBI to acknowledge the stress on their books, face the prospect of taking heavy haircuts to write off some of these loans at whatever residual value remains in the businesses. When combined with their need to scale up their capital base to comply with Basel III norms, public sector banks have naturally been in damage control mode rather than chasing growth like their private sector peers. 
The three-part package for lenders includes ₹18,000 crore from the Budget, ₹58,000 crore that banks can raise from the market (possibly by tapping the significant room available to dilute the government’s equity that remains well over 51%) and the issue of recapitalisation bonds worth ₹1.35 lakh crore. Though there are still many unknowns about the nature of these bond issues (whether they will affect fiscal deficit calculations or be off-balance-sheet sovereign liabilities, for instance), the overall plan gives banks a better sense about their immediate future. The bonds will front-load capital infusion while staggering the fiscal impact, which Mr. Subramanian expects to be limited to the annual interest costs on these bonds of about ₹9,000 crore. The Centre is betting this will strengthen the banks’ ability to extend credit at a faster clip. RBI Governor Urjit Patel has said this is the first time in a decade that there is a real chance of meeting the banking sector’s challenges. But it is still a long haul. While more details on this package are awaited, including how banks will be picked for funding and the possible interplay with proposed mergers of banks, equally critical will be the reforms that Finance Minister Arun Jaitley has promised as a necessary adjunct. Banks are where they are, not just because of capital constraints but also because of their inefficiencies and past lending overdrives.


1) Saddled
Meaning: Burden (someone) with an onerous responsibility or task.
Example: He’s saddled with debts of $12 million.
Synonym: Burden, Encumber
2) Wary
Meaning: Feeling or showing caution about possible dangers or problems.
Example: Dogs which have been mistreated often remain very wary of strangers.
Synonym: Cautious, Careful
Antonym: Incautious, Careless
3) Slipping
Meaning: Be behaving in a way that is not up to one’s usual level of performance.
Example: Oh, Daddy, I don’t understand why my common sense is slipping.
Synonym: Decline, Deteriorate
Antonym: Remain, Prefect
4) Seized
Meaning: Take hold of suddenly and forcibly.
Example: She jumped up and seized his arm.
Synonym: Grab, Grasp
5) Over-leveraged
Meaning: (of a company) having taken on too much debt.
Example: Thus the strain of the adjustment forced on its overleveraged UK operations falls directly on the Tata group in India.
6) Afresh
Meaning: In a new or different way.
Example: She left the job to start afresh.
Synonym: Anew, Again
7) Bankruptcy
Meaning: The state of being bankrupt.
Example: Many companies were facing bankruptcy.
Synonym: Insolvency, Liquidation
Antonym: Richness, Wealth
8) Invoke
Meaning: Cite or appeal to (someone or something) as an authority for an action or in support of an argument.
Example: The antiquated defence of insanity is rarely invoked in England.
Synonym: Cite, Refer to
9) Insolvency
Meaning: The state of being insolvent.
Example: The club was facing insolvency.
Synonym: Bankruptcy, Liquidation
Antonym: Rise, Win
10) Elusive
Meaning: Difficult to find, catch, or achieve.
Example: Success will become ever more elusive.
Synonym: Difficult to catch, Difficult to find
Antonym: Confronting, Enticing
11) Prospect
Meaning: The possibility or likelihood of some future event occurring.
Example: There was no prospect of a reconciliation.
Synonym: Likelihood, Hope
Antonym: Hopelessness, Unlikelihood
12) Haircuts
Meaning: A reduction in the stated value of an asset.
Example: The banks would probably be willing to take a haircut on the rest.
13) Residual
Meaning: Remaining after the greater part or quantity has gone.
Example: The withdrawal of residual occupying forces.
Synonym: Remaining, Leftover
Antonym: Base, Core
14) Comply
Meaning: Act in accordance with a wish or command.
Example: We are unable to comply with your request.
Synonym: Abide by, Act in accordance with
Antonym: Deny, Dissuade
15) Dilute
Meaning: Make (something) weaker in force, content, or value by modification or the addition of other elements.
Example: The reforms have been diluted.
Synonym: Diminish, Reduce
Antonym: Grow, Develop
16) Recapitalisation
Meaning: Provide (a business) with more capital, especially by replacing debt with stock.
Example: A plan to recapitalize the state-owned airline.
17) Deficit
Meaning: The amount by which something, especially a sum of money, is too small.
Example: An annual operating deficit.
Synonym: Shortfall, Deficiency
Antonym: Enough, Abundance
18) Instance
Meaning: An example or single occurrence of something.
Example: A serious instance of corruption.
Synonym: Example, Occasion
19) Front-load
Meaning: Distribute or allocate (costs, effort, etc.) unevenly, with the greater proportion at the beginning of the enterprise or process.
Example: What we need, they say, is front-loaded temporary tax cuts.
20) Infusion
Meaning: The introduction of a new element or quality into something.
Example: The infusion of $6.3 million for improvements.
Synonym: Introduction, Instilling
21) Staggering
Meaning: Arrange (events, payments, hours, etc.) so that they do not occur at the same time.
Example: Meetings are staggered throughout the day.
Synonym: Spread, Spread out
22) Haul
Meaning: Pull or drag with effort or force.
Example: He hauled his bike out of the shed’
Synonym: Drag, Pull, Tug
Antonym: Loss, Effortless
23) Interplay
Meaning: The way in which two or more things have an effect on each other.
Example: The interplay between inheritance and learning.
Synonym: Interaction, Interchange
24) Adjunct
Meaning: A thing added to something else as a supplementary rather than an essential part.
Example: Computer technology is an adjunct to learning.
Synonym: Supplement, Addition
Antonym: Lessening, Subtraction
25) Constraints
Meaning: A limitation or restriction.
Example: Time constraints make it impossible to do everything.
Synonym: Restriction, Limitation
Antonym: Liberty, Allowance

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