2nd Covid wave increased financial risks to households, small biz: Moody's

The second wave of Covid infections has increased financial risks to households and small businesses, Moody’s has said. This, in turn, Moody’s said may hurt bank profitability going ahead.

“New loan forbearance and liquidity measures by the central bank, and government’s plans to set up an asset reconstruction company to take over stressed loans, along with modest recapitalization of public sector banks, will mitigate, but not eliminate, sector risks,” Moody's said.

India’s financial sector, the rating agency said, is the main driver of potential event risk to the sovereign. Structural inefficiencies, it believes, continue to constrain growth potential and limit