About 5-8% of loan book will be recast under RBI scheme, says ICRA

With the expectation of reduced slippagges of 3-4 per cent, the GNPAs might increase to 9.8-10.3 per cent by March 31, 2021 from 8.5 per cent as on March 31, 2020

With tighter rules for debt recast in place, around 5-8 per cent of overall loans may be restructured compared the 10-15 per cent of loans expected to come under the moratorium by September 2020, according to rating agency ICRA.

Reserve Bank of India has framed strict norms for loans to be eligible for restructuring, like considering only borrowers with dues upto 30 days as on March 01, 2020 for recast. Moreover, resolution plans will  now be required to go through an independent credit assessment (ICA) and banks will have to make a higher upfront provisioning for restructured loans.

Anil Gupta,