Second Covid-19 wave heightens risks for Indian banks, says Fitch

Agency already sees moderately deteriorating environment for sector in 2021. Headwinds will intensify if rising infections and follow-up measures to contain the virus further affect business

Rating agency Fitch today said the second wave of Covid-19 infections poses increased risks for India's fragile economic recovery and its banks.

Fitch already expects a moderately worse environment for the Indian banking sector in 2021. But, headwinds would intensify should rising infections and follow-up measures to contain the virus further affect business and economic activity.

India's active Covid-19 infections have been increasing at a rapid pace; new infections exceeded 100,000 a day in early April 2021, against 9,300 in mid-February 2021.

Fitch forecasts India's real GDP growth at 12.8 per cent for the financial year ending March 2022 (FY22). This factors in