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Swift economic recovery key to limit loan losses for Indian banks: Fitch

Lenders face a tough operating environment in the near term, with a spike in stressed loans and write-offs due to the economic fallout of the coronavirus pandemic

Fitch rating agency
Fitch Ratings does not expect GDP to return to pre-pandemic levels until 1Q22

Swift economic recovery will be critical in limiting loan losses for Indian banks in what is likely to be a protracted period of weakness in the asset-quality cycle, says Fitch Ratings. Indian lenders face a tough operating environment in the near term, as stressed loans and write-offs increase as a result of the economic fallout of the coronavirus pandemic. In September, Fitch revised India’s (BBB-/Negative) growth forecast for the year ending March 2021 (FY21) to -10.5 per cent, from five per cent. This revision partly reflected the 23.9 per cent (year-on-year) decline ...