"Our study says around 2-2.5 per cent of banking sector credit could slip in the next 12-18 months... close to Rs 2-2.3 trillion (of loans) could slip in the next 12-18 months," India Ratings and Research's Senior Analyst for Financial Institutions, Udit Kariwala, told BTVi in an interview.
"This is purely from the corporate book and it does not include the agricultural and retail stress."
He also said the "meaningful recovery" of bad loans has not been happening.
"The banks have been talking about the recoveries of bad loans but we are yet to see the meaningful recovery happening. It has been shown in numbers.
"I do not know how the banks are benchmarking this... I do not see very substantial kind of recovery in the next 12-18 months," he said.
Kariwala also pointed out the important things would be the resolution of the default cases which have been referred to the National Company Law Tribunal (NCLT) as going through of the NCLT cases would induce confidence in the system.
"Even the NCLT cases go through, the hair-cut would be deep. Recoveries could not be heavy," he said, adding that more provisioning for the bad loans across sectors could be required.
(This story has not been edited by Social News XYZ staff and is auto-generated from a syndicated feed.)
Doraiah Chowdary Vundavally is a Software engineer at VTech . He is the news editor of SocialNews.XYZ and Freelance writer-contributes Telugu and English Columns on Films, Politics, and Gossips. He is the primary contributor for South Cinema Section of SocialNews.XYZ. His mission is to help to develop SocialNews.XYZ into a News website that has no bias or judgement towards any.
This website uses cookies.