The debacle of United Bank of India is just the tip of the iceberg. As Equity Master  estimates, the bad loans and restructured loans put together may lead to a total write-off of Rs 3.5 to 4 trillion for the Indian banking sector! And what is the FM's response to it? Well, in the interim budget yesterday, FM promised recapitalization of PSU banks to the tune of Rs 112 bn. Needless to say that the incremental capital will just be fraction of the total NPA burden in banks' books. And without any stringent measures to arrest further slippage in asset quality, India is staring at a full blown banking crisis. One that could not just erode shareholder wealth but also endanger depositor money. But FM Chidambaram seems oblivious to these consequences. That India's largest bank had to be bailed out by the LIC for its QIP offer should have been indicative enough of investor sentiments. The RBI has already sounded warnings about the health of the sector. However, without government support to bring the PSU banks in order, 70% of India's financial sector is at the realm of crisis.