NPA Crisis

With mounting debts and dwindling market share, the need for a decisive government strategy is urgent

The central bank said the banking system and the non-banking financial companies (NBFCs) remain resilient, backed by high capital ratios, improved asset quality and robust earnings growth

Refusing to defreeze the accounts and set aside the show-cause notice issued to a Kerala-based loan app company, the High Court of Karnataka has cautioned against such apps owned by Chinese entities and individuals which are used to destabilise India. In a recent judgment, Justice M Nagaprasanna, while rejecting the petition of Inditrade Fincorp Ltd, registered in Kochi, said, "It is in public domain that several borrowers have committed suicide unable to bear the harassments of the representatives of such loan apps. The office-bearers of several of these companies which control and operate such mobile loan apps are said to be entities of China or individuals from China sitting as directors of such mobile loan apps. Therefore, it becomes necessary for an investigation, in the least to be conducted of any such company who would operate such loan apps and has transactions between each other." Refusing to stall the investigation against the company, the HC said, "The investigation woul

Normally banks take 52-56 months of time to detect such cases and initiate follow-up actions, said Finance Minister Nirmala Sitharaman

Loans to the sector became huge NPAs largely due to the practice by lenders of offering unconditional mobilisation advance and time gap between preparation of a DPR and awarding the bid

SC ruled that plea by financial creditor won't get time barred even if filed beyond a period of three years from the date of declaration of the loan account as NPA.

Scheduled commercial banks were carrying NPAs worth Rs 8.96 trn on their balance sheet at the end of March 2020

Bajaj Finance, in a mid-quarter update, indicated that its B2B and Auto Finance businesses were most affected due to strict lockdowns in majority of states

Analysts believe that the truer impact of Covid-19 as regards NPAs could be visible in the quarter even as banks may be tempted to remain prudent due to the second wave of coronavirus

Here's a look at the full extent of India's bad loan problem in selected financiers

Banking stocks have lagged the market in the rebound off coronavirus lows, hit on March 23, 2020

Q3 GDP growth, which has come in at 4.7%, could be the precursor to an even higher growth number in Q4 which should be around 5%

Margins may stay strong, but Street will keep eye on asset quality

The bank had reported Rs 11,333.24 crore net NPAs during the year while the RBI assessed it at Rs 13,898.24 crore

Criminalising the lender and the defaulter shifts the focus away from the inefficiencies in the corporate lending process

Any more debt repayment delays or defaults risk reversing an expected recovery in India's gross bad loan ratio and worsen a widening shadow bank crisis

The govt has unveiled steps ranging from concessions on vehicle purchases to hastening of capital infusion in state-run banks to help re-ignite an economy that's slowed sharply due to weak consumption

The windfall treasury profits come as a relief for lenders staring at a potential surge in bad loan provisions due to a slowing economy and a cash squeeze in the nation's shadow banking system

Moody's said it expects growth to be 'weaker' in the next 12-18 months, without quantifying its growth expectation

Calls for one-time relief that will allow restructuring of viable companies and not expose them to the threat of insolvency resolution and resultant liquidation