Stress report: Loan loss ratios could rise but banks have enough capital, says RBI

Among the sectors that person been severely deed by the lockdowns and curfews are retail trade, travel, hospitality, aviation and MSMEs.

The Reserve Bank of India (RBI) estimates indebtedness losses astatine banks could emergence 232 ground points y-o-y to 9.8% by March 2022 successful a baseline accent scenario, adjacent arsenic banks are well-capitalised to negociate the stress.

With the pandemic having wounded businesses crossed sectors, the gross non-performing plus (NPA) ratio could emergence to 10.36% by March 2022 if the accent is mean and 11.22% if it is severe, the cardinal slope said connected Thursday.

Among the sectors that person been severely deed by the lockdowns and curfews are retail trade, travel, hospitality, aviation and MSMEs.

The authorities has travel retired with recognition warrant schemes for MSMEs arsenic besides for the healthcare assemblage which should assistance revive businesses and rein successful defaults.

Public assemblage banks are present expected to fare little severely than earlier, with the atrocious indebtedness ratio forecast to deed 12.5% by March adjacent year; successful March, this ratio was 9.54%.

The bully quality is that banks are well-capitalised and moreover, person precocious proviso sum ratios. The autumn successful the superior adequacy would beryllium comparatively tiny and, adjacent if the going gets truly bad, each 46 banks would person adequacy ratios good supra the regulatory minimum of 9%.