Is the banking crisis coming? This year bad loans may increase beyond 10 lakh crores

Banks’ NPAs (Non-Performing Asset) ie bad loans can cross Rs 10 lakh crore by the end of the current financial year. The main reason for this is the problem in repaying the loans given to retail and micro, small and medium enterprises (MSMEs). This was said in a study on Tuesday.

According to a study by industry body ASSOCHAM and rating company CRISIL, “due to difficulty in repayment of loans in the retail and MSME sector and restructuring of some assets, by March 2022, NPAs may increase to 8.5-9 percent.” According to the study, the gross non-performing asset (GNPA) of banks can go above Rs 10 lakh crore by March 2022. It said the current pressure on asset quality is different from the pressure seen a few years back. At that time, NPAs had increased mainly due to default in repaying loans from large accounts.

More likely to sink retail loans

According to the study, this time there is a possibility of problem in repaying loans in small accounts, especially MSME and retail category accounts. However, it has also been said that the debt restructuring scheme announced for MSME and small borrowers should check the huge increase in NPAs. Also, there are investment opportunities in this type of asset for investors looking to invest in stressed assets.

RBI had also expressed this estimate in its report

In July, the Reserve Bank had said in its report that the gross non-performing assets (GNPA) ratio of banks could increase to 9.8-11.22 per cent by March 2022. At the end of March 2021, the Gross NPA Ratio for the banking sector stood at 7.48 per cent. Any loan is classified as NPA. Its ratio deteriorates when it has not been paid for more than 90 days. The central bank said that due to the effect of Corona, the NPA ratio of all banks may increase to 9.8 percent by March 2022. If the issue is more serious, it can first go up to 10.36 percent and later to 11.22 percent.

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