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.
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Moody s Expresses Doubts On Higher Revenue Targets From Tax, Divestment
The Union Budget 2021-22 has pegged a fiscal deficit of 9.5 per cent for the current financial year as against the consensus 7 per cent, and 6.8 per cent for 2021-22 with a market borrowing of around Rs 12 lakh crore
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Moody s Investors Service, while silent on the sovereign rating on the higher-than-expected fiscal deficit numbers, expressed doubts over attaining the higher revenue targets and divestment realisation as assumed in the Budget.
The Union Budget 2021-22 has pegged a fiscal deficit of 9.5 per cent for the current financial year as against the consensus 7 per cent, and 6.8 per cent for 2021-22 with a market borrowing of around Rs 12 lakh crore. It also assumes Rs 1.75 lakh crore to be scooped up from divestment.