Speaking at a meeting organised by Indian Merchants Chamber (IMC) in Mumbai, Verma averred that the report went into all issues affecting the earning capacity and profitibility of not just the three weak banks, but the entire financial system.

The restructuring of the three banks should be at the organisational, operational, financial and systemic levels," he said.

"The issue now is that if the remedial steps as recommended in the report are not taken then these units will have to close down," he said. He further said that capital adequacy and other prudential norms are being strengthened across the world in accordance to the report of the Basle committee.

"There is a view that the entire banking system in the country is deficient and is prone to financial risks. The system can face such risks two to five years down the line. Nobody knows the extent to which these risks can plague the financial system," he stated.