On Wednesday, domestic ratings agency India Ratings & Research reported that banks are expected to restructure 7.7% of the system's overall loan or up to Rs 8.4 lakh crore under the recently announced recast package. If the step of restructuring is not taken, then there was a possibility of the NPAs of this 8.4 lakh crore loan exceeding 60 percent. Banks' income from restructuring will also improve, as they will have to make relatively less provision.
Earlier this month, the RBI announced the recast package. The Reserve Bank of India also allowed recast for low value non-corporate loans. The ratings agency said, "Contrary to earlier experience, after the global financial crisis, where about 90 per cent of the restructuring took place in corporate loans, the non-corporate segment, which includes small businesses, agricultural loans and retail loans, has a higher share this time. Will be responsible for.
The agency estimates that the total amount of non-corporate loans for recast will be Rs 2.1 lakh crore. The agency said that the non-corporate segment was showing signs of tension even before the epidemic began. In the corporate segment, there was a stretch of Rs 4 lakh crore in loans before COVID-19. The agency said that within the corporate segment, the restructuring could range from Rs 3.3 lakh crore to Rs 6.3 lakh crore. This was adopted by banks. Will depend on strategies. The agency said that this range is quite wide, as it appears that 53 percent are at high risk, while 47 percent are at moderate risk.
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