Comparison of Central Govt bailout of Banks

 

Feature	India (2017–2021 Recap Bonds)	Indonesia (1997–2004 Bank Restructuring Bonds)	Ireland (2008 NAMA Bonds)
Context	Twin Balance Sheet Problem: Stalled projects → NPAs in PSBs.	Asian Financial Crisis: Currency crash + bank insolvencies.	Global Financial Crisis: Property bubble burst, banks loaded with toxic real-estate loans.
Issuer	Government of India.	Government of Indonesia via IBRA (Indonesian Bank Restructuring Agency).	Irish government via NAMA (National Asset Management Agency).
Subscribers / Holders	Public Sector Banks (PSBs) themselves; non-tradable.	Commercial banks; BRBs were tradable & could be sold for liquidity.	Irish banks (who swapped bad loans for NAMA bonds); later held by ECB & markets.
Purpose	Boost bank equity capital without upfront fiscal cost; improve CAR.	Replace NPAs with safe sovereign securities; restore solvency.	Remove toxic property loans from bank balance sheets; provide liquidity.
Mode / Type	Sovereign bonds, often zero-coupon or low coupon, non-tradable, long maturity.	Interest-bearing sovereign bonds, long-term (10–20 years), tradable.	Government-guaranteed bonds, interest-bearing, eligible as collateral at ECB.
Amount Issued	~₹2.76 lakh crore (USD ~40 bn) via recap bonds (2017–2021).	~IDR 430 trillion (≈ USD 45–50 bn).	~€30 billion NAMA bonds (≈ USD 40 bn).
Accounting Effect – Banks	Assets: Recap bonds. Equity: Govt infusion → higher CAR.	Assets: BRBs replace NPAs. Equity: Solvency restored.	Assets: NAMA bonds replace property loans; liquidity restored.
Accounting Effect – Govt	Liabilities: Public debt ↑. Assets: Higher PSB equity stake.	Liabilities: Debt ↑ (up to 50% of GDP). Assets: Claims on banks & recoveries via IBRA.	Liabilities: Sovereign-guaranteed bonds. Assets: NAMA held loans (often impaired).
Uniqueness	“Circular internal loop” — govt issues bonds, PSBs subscribe, govt infuses equity into same PSBs.	Direct swap of NPAs for sovereign bonds (banks got tradable securities).	NAMA acted as a “bad bank”, using govt bonds to buy toxic loans at discounted prices.
Outcome	Stabilised PSBs; supported by IBC resolutions later. Fiscal impact spread over years.	Banking system rescued but govt debt surged sharply.	Banks stabilised but Ireland’s fiscal position collapsed → EU/IMF bailout (2010).