Investors are also sceptical of putting in more money amid growing border tensions with China, says Paras Bothra of Ashika Stock Broking.
Moreover, most of the public sector banks have taken approval in advance for raising Tier I and Tier II capital during the current fiscal depending on the need.
The message here is clear: the management expects pain on the asset quality going ahead and doesn’t want to lower the guard
The expected sharp rise in NPAs brings two inter-linked issues to the fore. One is the need to augment bank capital. Second, we need to conclusively address the bad loan issue so that lending gains traction and supports the economic recovery.
Loan sales may be resorted to by lenders for any reasons ranging from strategic sales to rebalance their exposures or as a means to achieve resolution of stressed assets by extinguishing the exposures.
The rating agency said that while the lockdown has surely impacted the debt-servicing ability of borrowers, the extent of revival in economic activities as the restrictions are eased will drive the final impact on asset quality of banks.
Giving details, it said the statutory inspection of BoI with reference to its financial position as on March 31, 2017 and March 2018 and the risk assessment reports pertaining thereto revealed, inter-alia, non-compliance with the certain directions.
The main advantage of the IBC is that it lays out a clearly defined process that seeks to keep the business as a going concern
The industry hopes the government’s second relief package includes a lower GST for the sector and no penalty on delayed TDS and GST payments at least for a year
Moratorium period to be excluded for NPA recognition
The Delhi High Court Monday said that prima facie Yes Bank could not have declared a private company's account as a non-performing asset (NPA) for its failure to pay loan instalments due to coronavirus pandemic.
The NPA ratio in India is likely to fare similarly to China's (1.9 per cent 2 per cent) but the credit costs ratios could be worse, increasing by about 130 basis points.
The fear factor in this market may lead to a further sell-off and liquidation of portfolio and redemption of mutual funds
April may turn out to be a sucker’s rally where the fence-sitters will be pulled in. We will see some amount of price stabilizing but a major rally to go past 10,000 on the Nifty is less likely.
The Association also asked the central bank to allow banks to extend the period of repayment of loans by six months for loans across categories spanning industry, agriculture and retail customers.
The coronavirus outbreak also poses new threats to the amalgamated entity to clock around 12 percent loan growth at the end of the next fiscal.
The comments come days after Yes Bank was put under a moratorium by the government and the Reserve Bank of India (RBI) due to an inability to raise capital
These include open plots, residential, commercial and industrial properties across the country.
Unless growth picks up and credit conditions improve, the risks to bank balance sheets will linger
The spike in bad loans is being driven by the realty books, which has almost trebled as of the September 2019 quarter to 10 percent, read the Crisil report.
Union Minister of State for Finance Anurag Thakur also said in Lok Sabha that scheduled commercial banks and select financial institutions have reported frauds to the tune of Rs 1,13,374 crore in the first half of the current financial year.
Among the lenders, SBI was the first to classify the account as ‘fraud’, followed by ICICI Bank and then IDBI Bank.
This group of lenders have learnt how to make most of the opportunity at the bottom of the pyramid
The public sector bank, in an exchange filing, had said that the RBI assessed the bank's gross non-performing assets at Rs 1.85 lakh crore in FY19, whereas the bank had disclosed gross NPAs of Rs 1.73 lakh crore.
Protecting a company from the actions of its promoters will help the acquirer in an insolvency process. But it could create a moral hazard