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Gross bad debt to rise 9%, stressed assets to touch 11% for banks, says Crisil

The Covid-19 relief measures such as the restructuring dispensation, and the Emergency Credit Line Guarantee Scheme (ECLGS) will help limit the rise.

October 19, 2021 / 04:01 PM IST

Bad loans of Indian banking sector will rise at a slower pace in the current fiscal year compared with the 2018 peak, rating agency Crisil said on October 19.

Gross non-performing assets (NPAs) of banks will rise to 8-9 percent this fiscal, well below the peak of 11.2 percent seen at the end of fiscal 2018, the agency said in a report.

The Covid-19 relief measures such as the restructuring dispensation, and the Emergency Credit Line Guarantee Scheme (ECLGS) will help limit the rise, it said.

With around two percent of bank credit expected under restructuring by the end of this fiscal, stressed assets, comprising gross NPAs and loan book under restructuring, should touch 10 percent to 11 percent, the agency said.