NPAs of banks to be doubled by end of current financial year, currently Rs 9.35 lakh crore are stuck in bad loans

0
1218

The economic impact of the coronavirus epidemic is visible in all sectors. It can also have a bad effect on the banking sector. According to senior government officials and top bankers, bad loans of Indian banks could be doubled due to coronavirus. As of September 2019, about 9.35 lakh crore rupees of banks are stuck in bad loans. This is equivalent to 9.1 per cent of the total assets of banks.

Risk of default of 20 to 25 percent loan
Officials aware of the matter say that the government is considering that by the end of the current financial year, non-performing assets (NPAs) of banks may rise to 18 to 20 percent. According to officials, at present there is a risk of default of 20 to 25 percent of the outstanding loan. It is feared that credit growth will suffer due to poor loan growth. Also, the economic recovery of the corona epidemic may be delayed.


NPA may double compared to last quarter
A finance head of a public sector bank told Inventiva that it was a time of uncertainty. We are expecting that banks will announce double NPA amount this time as compared to last quarter. According to a report, the finance ministry declined to respond. At the same time, the Reserve Bank of India and the Indian Banks Association did not respond to e-mails.

40-day lockdown brings economy to a standstill
A 40-day nationwide lockdown imposed to prevent the spread of corona infection has brought the Indian economy to a standstill. The lockdown has been extended by two weeks to May 17. However, during this period the government has given some more leeway in the remaining districts of Corona.

READ  Facebook: Explaining the company's massive share slump

Economy expected to open fully by July
Many bankers say that the Indian economy will open only after June or July. Due to this, the loan will be adversely affected. In particular, loans given to small and medium sized businesses will be badly affected. The reason for this is that all the top-10 cities in the country are in the most threatened red zone of Corona and these cities are under strict restrictions.

Top 10 cities contribute significantly to the economy
Recently, a report released by Axis Bank said that the top-10 cities of the country contribute significantly to the economy. Till December, about 83% of the total loan given by banks has been given to the business of these cities. Another source says that due to coronavirus, economic growth has slowed down and the risk is high.

BOB’s NPA increased 6-fold in 6 years
NPA of Bank of Baroda (BOB) has increased 6 times in last 6 years. This information has been revealed in response to an RTI. According to RTI, Bob’s NPA in March 2014 was Rs 11,876 crore, which has increased to Rs 73140 crore as on 31 March 2020. Similarly, Indian Bank’s NPA has increased nearly four times to Rs 32,561 crore by December 2019 as compared to 8068.05 crore in March 2014.

While Writing This news there are 42,670 coronavirus cases in India, with 1,395 deaths.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.