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Cautious on PSU banks as high provisioning to stay: Morgan

The other major problem for PSU banks was lack of adequate capital, and they need to be capitalized at the earliest, Agarwal said

State-owned banks are likely to be weighed down by high provisions in FY16 even if the pace of formation of bad loans slows, says Anil Agarwal, Head of Research, Banks, Morgan Stanley.

In an interview to CNBC-TV18, Agarwal says there could be slippages on loans restructured two years back as the economy now is weaker than what it was two years back.

The other major problem for PSU banks was lack of adequate capital, and they need to be capitalized at the earliest, Agarwal said.

He said investors are quite positive on banks, but the interest is skewed towards private banks and even non-banking financial companies.

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