Banks need to closely monitor asset quality, prepare for higher provisioning: RBI
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Last Updated: May 27, 2021, 05:00 PM IST
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Synopsis
The waiver of compound interest on all loan accounts which opted for moratorium during March-August 2020 may put stress on banks' financial health. The apex bank, however, expressed confidence that banks are better positioned than before in managing stress in their balance sheets in view of higher capital buffers, improvement in recoveries and a return to profitability.
The waiving of interest on interest charged on loans during moratorium period (March 1, 2020 to August 31, 2020) may also impinge on lending institutions' finances. (Representative image)