Spike in Covid cases may impact banking system's restructured book: Icra

Demand for recast may also go up for loans previously restructured; RBI warns of drop in bank's asset quality but reassures that they are strong enough to withstand huge shocks

The asset quality of the banking system, especially the restructured book, may face headwinds in the coming days as Covid-19 cases have started rising rapidly once again, rating agency Icra said.

As of September 2021, India’s banking system restructured loans worth Rs 2.8 trillion or 2.9 per cent of the standard advances, of which about Rs 1 trillion was restructured under Covid 1.0 and Rs 1.2 trillion was restructured under Covid 2.0, and the rest comprised of restructuring done for micro, small & medium enterprise (MSME).

Anil Gupta, Vice President–Financial Sector Ratings, Icra Ratings, said, as banks restructured most of