Home / Finance / News / Covid-19 crisis: Slippages may jump to Rs 5.5 trillion, says India Ratings

Covid-19 crisis: Slippages may jump to Rs 5.5 trillion, says India Ratings

Credit costs could touch Rs 2.7 trillion

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Steps announced by the government as part of the economic package are mid-to-long-term ones. If these are implemented timely, they could aid materially to reduce the expected stress in MSMEs.

Abhijit Lele Mumbai

3 min read Last Updated : May 22 2020 | 2:41 AM IST

Stress emerging from the severe economic shock caused by steps to contain the pandemic may drive total slippages to Rs 5.5 trillion in FY21.

The corporate side may see slippages of Rs 3.4 trillion, and non-corporate side — retail, farming and MSMEs — may account for Rs 2.1 trillion, according to India Ratings.

Banks faced elevated provision pressure (amount set aside for stressed loans) resulting from the corporate stress cycle, from FY16-FY20. For this, they had made substantial provisions and were moving towards a moderated credit cost cycle.

However, the Covid-related measures are likely to result in another cycle of

Topics : Coronavirus Lockdown Non-performing assets Indian banking sector Bad loans loan default Loan repayment Bank loans MSME sector India Inc Corporate loans farm loans farmers retail loans India Ratings Banks infrastructure Construction sector Hospitality industry tourism sector telecom sector in India iron and steel industry agriculture sector public sector banks PSBs Bank credit

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