The proposed Rs 70,000-crore capital infusion into public sector banks (PSBs) will provide a timely booster to the lenders. The move, announced in the Budget, is likely to be credit positive for the banking sector and the economy, India’s Budget attempts to address the trust deficit in the financial sector.
The capital infusion will help some banks to come out of the central bank’s prompt corrective action and resume lending and clean up their balance sheets
 PSBs still require substantial reforms to improve risk management, service quality, efficiency, and diversity of product offerings.  
The growth and profitability of NBFCs in India have been under pressure since the past nine months as the cycle of easy liquidity and low cost of funds reversed.
The government also announced the amendment to the Reserve Bank of India Act to strengthen the powers of the central bank over non-government-owned NBFCs and allow for effective resolution of stressed financial institutions.  
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