Stressed assets

PSBs will need capital to finance economic revival

The re-imposition of lockdown in various parts of the country to contain the spread of Covid-19 will affect the normalisation of economic activity and increase uncertainty. A gradual recovery will directly affect the ability of borrowers to repay debt. As a result, non-performing assets (NPAs) in the banking system are bound to go up in the coming quarters. According to the financial results for the January-March quarter, the situation in the banking sector improved somewhat, but there was still considerable stress, especially in the public sector banks (PSBs). For instance, PSBs, as a group, set aside over Rs 50,000 crore