Home / Finance / News / Indian banks' asset quality pressure may last for at least 2 years: Fitch

Indian banks' asset quality pressure may last for at least 2 years: Fitch

Fitch estimates that the impact on impaired loan ratios could be anywhere between 200 to 600 basis points depending on the severity of stress and banks' individual risk exposures.

loans, banks, moratorium, lending, lenders

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Illustration: Binay Sinha

4 min read Last Updated : May 29 2020 | 2:54 PM IST

Indian banks are looking at significant asset quality challenges for at least the next two years despite regulatory measures, according to Fitch Ratings.

Fitch estimates that the impact on impaired loan ratios could be anywhere between 200 to 600 basis points depending on the severity of stress and banks' individual risk exposures.

The latest set of measures announced by Reserve Bank of India (RBI) includes an extension of the 90-day moratorium on recognition of impaired loans to 180 days in addition to several relaxations in bank lending limits including allowing banks to fund interest on working capital loans.

"These measures will put a

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