Restructured banking assets to shoot-up by Rs.1,000 bn: India Ratings

Financial ratings agency India Ratings and Research Tuesday said that it expects the cumulative restructured assets in the Indian banking system to shoot-up by Rs.600 billion-Rs.1,000 billion in the next five months.

"Around one in four of the 500 largest corporate borrowers may formally be tagged as financially distressed (identified as non-performing asset (NPA), corporate debt restructuring (CDR)) by end-FY15," the agency was quoted in a statement.

According to the ratings agency, these 500 corporates had a balance sheet domestic currency debt burden of Rs.28,760 billion in 2013-14.

"The agency expects banks to consider taking a decisive action on their corporate accounts, which may have been servicing their debt with some delay, as the process of the Reserve Bank of India's calibrated withdrawal of regulatory forbearance peaks up speed from 1 April 2015," the statement said.

The agency further said that within the top 500 corporate borrowers, 83 corporates had an outstanding domestic debt of Rs.2,431 billion at 2013-14.

"If some of these corporates are unable to generate significant cash flow or infuse significant equity in the near term, they may be identified by their lenders for restructuring pursuant to RBI guidelines," the statement added.