A poor idea

Bad bank will only kick the can down the road

Premium

While recognition of stress is reasonably taken care of and resolution partially strengthened (through Insolvency and Bankruptcy Code), recapitalisation and reforms remain a doubtful patch.

Business Standard Editorial Comment New Delhi

3 min read Last Updated : Jan 19 2021 | 11:08 PM IST

Economic disruption caused by Covid-19 will push up non-performing assets (NPAs) in the banking sector. According to the latest Financial Stability Report of the Reserve Bank of India (RBI), under the baseline scenario, the gross NPA (GNPA) ratio can go up from 7.5 per cent in September 2020 to 13.5 per cent by September this year. The ratio would worsen if the macroeconomic conditions deteriorate. For the public sector banks (PSBs), it’s even worse. Their GNPA ratio can go up to 16.2 per cent by September 2021 under the baseline scenario, the report said. Clearly, weak bank balance sheets, particularly

Topics : Reserve Bank of India bad bank Indian banking sector Indian Banks banking reforms Non-performing assets RBI Financial Stability Report Financial Stability Report public sector banks PSBs private sector banks Shaktikanta Das

What you get on BS Premium?

Unlock 30+ premium stories daily hand-picked by our editors, across devices on browser and app.
Pick your favourite companies, get a daily email with all news updates on them.
Full access to our intuitive epaper - clip, save, share articles from any device; newspaper archives from 2006.
Preferential invites to Business Standard events.
Curated newsletters on markets, personal finance, policy & politics, start-ups, technology, and more.

VIEW ALL FAQs

Need More Information - write to us at assist@bsmail.in