RBI policy review: Banks have more bad debt covered on higher provisioning

High defaults on small home loans a matter of worry, says RBI

Indian banks have fortified their balanced sheets by substantially hiking provision for bad loans in FY18. Reserve Bank of India says the provision coverage is expected to improve further.  

N S Vishwanathan, deputy governor, RBI, said: “We have taken note of the financials reported by the banks. Much of it is given by better recognition of NPAs. A notable feature of this is the provision coverage ratio, which for almost all the banks has gone up substantially."

According to Rama Patel, Director, CRISIL Ratings, banking system’s provisioning cover (excluding write-offs) for NPAs increased to 50 per cent as on March 31, 2018,