PSBs stare at tough quarter over coronavirus and higher provisioning

Slimmer chances of recovering Rs 20,000 cr from Bhushan Steel resolution in the near future add to lender's woes

The fourth quarter of the current fiscal year is likely to prove difficult for public sector banks, with the possibility of major restructuring caused by the coronavirus outbreak, and higher provisioning needs due to failed resolutions of accounts under ICA (inter creditor agreement). In addition, with no visibility on recovery from Bhushan Power, which is currently under NCLT (National Company Law Tribunal), many public sector banks that had recently turned profitable after months of losses, might once again slip into red, say bankers.

Last quarter, several lenders had drawn comfort from Essar Steel's resolution, which alone yielded close to Rs 42,000