InvestorQ : What do you think of the ET report on 02 March that another Rs.2.54 trillion of fresh NPAs could be created in Indian banks? Is that a possible scenario?
Khushi Patel made post

What do you think of the ET report on 02 March that another Rs.2.54 trillion of fresh NPAs could be created in Indian banks? Is that a possible scenario?

Answer
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Anjana Aiyar answered.
7 months ago


This is based on a report prepared by India Ratings. According to the agency, this spurt in bad loans could occur largely because the growth was likely to fall short in the next couple of quarters. Depending on how much shortfall there is in growth, the accretion to gross NPAs could be anywhere between Rs.1.98 trillion and Rs.2.54 trillion according to the study. The weak consumption and the negative gross capital formation are the key reasons why the agency is expecting pressure on banks. If that happens, the banks could get back into losses and could require heavy capitalization.