Loan recasts may push NPAs up to 14% in FY21 due to Covid-19: S&P

"The Covid-19 pandemic may set back the recovery of India's banking sector by years, which could hit credit flows and, ultimately, the economy," the agency said

Amid reports of the RBI mulling restructuring of loans, global rating agency S&P on Tuesday said that a loan recast will only defer NPAs recognition and not solve the problem.

The agency also said operational outages and the recession because of the pandemic will have a deeper and longer impact on lenders than previously assumed, and estimated the gross non-performing assets ratio to rise up to 14 per cent in FY2021 from the 8.5 per cent in FY2020.

"The Covid-19 pandemic may set back the recovery of India's banking sector by years, which could hit credit flows and, ultimately, the