The Reserve Bank of India predicted on Wednesday that by September next year, the non-performing loans of Indian banks may rise to 9.5% of its total loans.
The central bank pointed out in its biennial financial stability report that if India’s GDP shrinks by 2.1% in the second half of this fiscal year and grows by 1.1% in the first half of the year, this will happen in a “severe stress scenario”. condition. Half of the 2022-’23 fiscal year.
The Reserve Bank of India stated that under the “baseline scenario,” that is, GDP growth in the second half of this fiscal year will be 6.3%, and GDP growth in the next fiscal year will be 12.5%, and non-performing loans may rise to 8.1%.
The Reserve Bank of India reported that in September this year, non-performing loans accounted for 6.9% of total loans, a record low in six years. However, the central bank pointed out that research in emerging economies shows that non-performing loans usually peak within six to eight quarters after the start of a recession.
The Indian economy has entered a recession phase in the second quarter (July to September) of the last fiscal year (2020-21). When GDP shrinks for two or more consecutive quarters, the economy is considered to be in a technological recession.
Affected by the nationwide coronavirus lockdown, the Indian economy contracted an unprecedented 23.9% in the first quarter of the previous fiscal year (April to June), and contracted by 7.5% in the second quarter.
However, the financial stability report released on Wednesday indicated that the lending solutions of Indian banks have improved. In the last financial stability report released in July, the Reserve Bank of India predicted that even under the “baseline scenario”, non-performing loans could rise to 9.8% by March 2022.
The Governor of the Reserve Bank of India Shakti Kantadas wrote in the preface of the document: “As highlighted in this issue of the Financial Stability Report, Indian financial institutions remain resilient during the pandemic, and the financial market is generally stable. Policies and regulations Support acts as a buffer.” Released on Wednesday.
…Thank you for making Scroll.in India’s most influential purely digital news organization.
We request that you donate to the Scroll Ground Reporting Fund to support our award-winning journalism. The fund will ensure that we can continue to ask questions that need to be asked, investigate what needs to be discovered, and record what must be recorded.
Complete News Source : Scroll.in
