An improvement in India s macroeconomic conditions is likely to alleviate stress for the country s banking sector. However, a hit from Covid-19 pandemic is inevitable, according to Banking Industry Country Risk Assessment: India , a report by S&P Global Ratings. Rating agency Standard and Poor’s (S&P) in a statement said the Indian government s strong efforts to shield banks from the Covid-19 pandemic have been largely successful. While the Indian economy is on a mend, the permanent GDP loss stemming from the brunt of the coronavirus is huge at 10 per cent. The banking system s weak loans are estimated at 12 per cent of gross loans. Credit costs, amount set aside for bad\weak loans, should improve to 2.2 per cent of total loans in the fiscal year ended March 31, 2022, from our estimate of 2.7 per cent for fiscal 2021.
India s Economic Recovery To Reduce Bank Stress, Says S&P Report
Moneylife Digital Team
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An improvement in India s macroeconomic conditions is likely to alleviate stress for the country s banking sector, says a report, titled Banking Industry Country Risk Assessment: India , from S&P Global Ratings.
It says, The Indian government s strong efforts to shield banks from the COVID-19 pandemic have been largely successful, in our view. However, a hit from the pandemic is inevitable. While the Indian economy is on a mend, the permanent gross domestic product (GDP) loss stemming from the brunt of the coronavirus is huge at 10%.
S&P estimates the Indian banking system s weak loans are at 12% of gross loans. It says, credit costs should improve to 2.2% of total loans in the fiscal year ended 31 March 2022, from its estimate of 2.7% for fiscal 2021.