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Tuesday, December 24, 2024 | 09:47 PM ISTEN Hindi

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When will SC status quo on bank loans end?

If it continues, wary of borrowers' opportunism and distorted credit discipline, banks may not come forward to lend even if we shout ourselves hoarse over their risk averseness

loans, rates, interest, investment, returns, earnings, growth, loss, profit
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The decision should come fast. A prolonged status quo is hurting the credit discipline almost the same way that farm loan waivers do

Tamal Bandyopadhyay New Delhi
Indian banks’ pile of bad assets had been on a decline. Their gross non-performing assets (GNPAs) dropped to 7.5 per cent of their advances in September 2020 and after setting money aside, net NPAs dropped to 2.1 per cent. The last stress test conducted by the Reserve Bank of India (RBI) projected the industry’s GNPA ratio increasing from 7.5 per cent in September 2020 to 13.5 per cent by September 2021 under the baseline scenario. But if the macroeconomic environment worsens and the stress deepens, it may rise up to 14.8 per cent.

The public sector banks are the most vulnerable
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper

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