The central bank's recast norms would provide banks
with an opportunity to keep viable accounts as standard in their books. This is because a large proportion of assets that otherwise would have slipped to the gross non-performing assets (GNPA) pool will now be restructured by banks.
However, the successful resolution of these accounts will depend on the revival of the economy, the prudent filters used for identifying assets for restructuring, critical assessment and tight monitoring.
Referring to corporate loans, India Ratings
said banks might carry out restructuring exercise for loans up to Rs 6.3 trillion. Nearly 53 per cent of this pool is at a high probability of restructuring/slippages. The balance 47 per cent is at moderate risk of restructuring, and the progress on these accounts will depend upon the progress of Covid-19 situation.
A high proportion of the debt from the real estate, airlines, hotels and other consumer discretionary sectors is likely to be restructured. The largest contribution would be from infrastructure, power and construction, it added.
The agency estimated that non-corporate loans about Rs 2.1 trillion may get restructured\slippages. The Covid-19 pandemic impacting all sections of the society, the regulator has also extended the restructuring to retail loans as well.
About half of slippages\restructuring in non-corporate category would be in MSME segment. Balance would be contributed by agriculture, where Covid19 impact is albeit a lower, and retail (like home loans).
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