All eyes on asset quality of banks and NBFCs with end of moratorium 2.0

Management commentary regarding asset quality and restructuring for the September quarter earnings would be a key monitorable

Banking and NBFC stocks were under pressure, with the Nifty Financial Services index declining 2.8 per cent on Monday — more than the 2.2 per cent decline in the Nifty.

The blanket 3-month moratorium ended on Monday, with all eyes now on the asset quality of banks and NBFCs. Though the RBI has offered restructuring and the sentiment is better than what it was a few months ago, experts believe an asset quality overhang still persists for lenders.

Deepak Jasani, head (retail research),  HDFC Securities, says: “While the earnings outlook has improved a bit for banks and some