Risk of a sharp fall in Indian banks’ asset quality has receded: Moody s
The banking system is shifting faster than ever before to an online-centric mode, making access to local bank branches less consequential and the ability to switch banks far easierPremium
1 min read
Share Via
Read Full Story
The Indian government s support measures for bank borrowers have softened growth in non-performing loans (NPLs), averting the risk of a sharp deterioration in asset quality, according to Moody s Investors Service in a new report. Ample domestic liquidity, loose monetary policy, moratoriums on loan repayments and government-guaranteed loans to small businesses have supported Indian banks asset quality. As a result, restructured loans have not increased as much as we expected at the onset of the pandemic, says Alka Anbarasu, a Moody s Vice President and Senior Credit Officer.
Global rating agency Moody’s said The Indian government s support measures for bank borrowers have softened growth in non-performing loans (NPLs), averting the risk of a sharp deterioration in asset quality. “Ample domestic liquidity, loose monetary policy, moratoriums on loan repayments and government guaranteed loans to small businesses have supported Indian banks’ asset quality. As a result, restructured loans have not increased as much as we expected at the onset of the pandemic,” said Alka Anbarasu, a Moody’s Vice President an d Senior Credit Officer. The Financial Stability Report in January 2021 had estimated that gross non-performing assets of banks in India may grow from 7.5 per cent in September 2020 to 13.5 Per cent by September 2021 under baseline scenario. The ratio may escalate to 14.8 per cent under a severe stress scenario.
Bank unions strongly oppose divestment, a bad bank and threaten to strike
Prabhjote GillFeb 3, 2021, 16:15 IST
Banks are threatening to go on strike if the government moves forward with its plan to disinvest public sector banks and Life Insurance CorporationBCCL
The All India Bank Officers’ Confederation (AIBOC) and the All India Bank Employees Association (AIBEA) are not on board with the Indian government’s plans to disinvest stake in banks.
According to them, selling government stake in public sector banks and Life Insurance Corporate (LIC) would threaten the stability of the sector.
Both organisations are threatening to strike if the government moves forward with its plans as announced by Finance Minister Nirmala Sitharaman during the Budget 2021-22 on February 1.Banking unions aren’t happy with the government’s plans to divest stake in public sector banks (PSBs). The All India Bank Officers’ Confederation (AIBOC) released a harshly worded statement opposing the an
Updated Feb 02, 2021 | 07:03 IST
Finance Minister Nirmala Sitharaman has proposed creating an asset reconstruction company (ARC) for India s bad-debt laden lenders to offload soured assets. ARC may only give banks respite from toxic debt flood | Photo Credit: BCCL
New Delhi: India s plan to set up a bad bank may boost valuations and ease short-term stress for state-owned lenders, but bankers and sector insiders are concerned it will not solve deeper problems.
Finance Minister Nirmala Sitharaman has proposed creating an asset reconstruction company (ARC) for India s bad-debt laden lenders to offload soured assets, which some analysts estimate now total $100 billion. It is a good move but there are more fundamental issues on how to recognise problem loans early and resolve them, which still need to be fixed, Sanjoy Datta, Deloitte India financial services practice head, said of the budget proposal.
China’s rust-belt province of Liaoning merges 12 local banks into one ‘first-class’ bank as bad loans mount
Liaoning’s economy grew 0.6 per cent last year, lower than the national average of 2.3 per cent and ranking 15th among the country’s 31 provincial jurisdictions
Coronavirus-induced economic problems have only exacerbated economic woes, particularly in China’s rural areas