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Demonetisation impact on banks: Asset quality risks will show only in Q4

The loss of income has severely dented the loan repayment ability of small borrowers

Abhijit Lele  |  Mumbai 

The asset quality problems for banks and finance companies are rising as small customers continue to struggle with the adverse effect of demonetisation.  But, it might show up only in the fourth quarter numbers, as the Reserve Bank of India (RBI) has given an additional 60 days for lenders to classify accounts as non-performing.  According to public sector bank executives, the work pressure from managing deposits and cash withdrawal is coming down and banks have begun to assess the impact of demonetisation on the loan side – both asset quality and demand for ...

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First Published: Mon, December 26 2016. 03:01 IST