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Restructured loans vulnerable to shocks

On a day when rising inflation numbers raised many a concern, the Reserve Bank of India (RBI) said rising prices and interest rates may adversely affect banking assets. Restructured standard loans remain vulnerable to shocks, and stare at the threat of turning into non-performing loans. Stress tests to check the ability of loans to withstand shocks had earlier showed the system’s resilience. However, banks need to remain vigilant to headwinds from the prevailing inflation and interest rate situation, which may hit the quality of assets, RBI said its Financial Stability Report. A ...