Moody's Assistant Vice President and Analyst Rebaca Tan said various measures by the Indian government to support borrowers have helped curb growth in public sector banks' non-performing loans (NPLs), and the volume of restructured loans is not as large as we anticipated.
Asset quality at the five largest rated public sector banks (PSBs) in India State Bank of India, Bank of Baroda, Punjab National Bank, Canara Bank, and Union Bank of India improved mildly in the first nine months of the year ending March 2021 (fiscal 2021) despite an economic contraction exacerbated by the pandemic.
However, India's public sector banks will continue to face capital shortages as their profitability remains weak given high credit costs, leaving them vulnerable to any unexpected stress, the agency said.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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