INSUBCONTINENT EXCLUSIVE:
IndiaRatings said it has observed a spurt in asset quality stress building up in non-corporate loans.MUMBAI: Banks are witnessing a spurt in
asset quality stress in the non-corporate segment and the overall loan loss provisions for lenders are expected to stay elevated till fiscal
year 2019-20, a report said
The outlook on private sector banks, along with SBI and Bank of Baroda among the state-run ones is stable, while all the other state-run
banks carry a negative outlook, IndiaRatings said in its mid-year outlook on banks Monday
Banks will continue with credit costs or provisions of up to 3 per cent for both the ongoing fiscal as well as the one after, according to
It attributed the higher credit costs to ageing of NPAs (non-performing assets) recognised earlier since the asset quality review of FY16,
there has been no loan repayment for 31-60 days, has increased to 40 per cent at the end of FY18 from 29 per cent the year-ago, the report
prevailing stressed financial conditions could intensify credit tightening, unless liquidity of financing channels is at least partially
per cent of the banking system unable to serve the lower-rated borrowers, volatile external environment and lack of alternatives for
favourable liquidity/ market conditions and refinancing pressures, which will give the large non-bank players private banks to up their
market share, it said.With the tightening in rates, some of the financing done by corporates through the bond markets can shift back to the
corporate loans, it said the total corporate assets under stress has stayed between 20 per cent and 21 per cent of the overall bank credit
for the two years to FY18.(Except for the headline, this story has not been edited by TheIndianSubcontinent staff and is published from a
