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Is the banking crisis coming? This year bad loans may increase beyond 10 lakh crores

Is the banking crisis coming?  This year bad loans may increase beyond 10 lakh crores

CRISIL and ASSOCHAM have shown a red flag regarding the banking sector in their report. It believes that by the end of the current financial year, the total bad loans on the banking sector will cross 10 lakh crores.

The chances of getting bad loans given to MSMEs are high.

Banks’ NPAs (Non-Performing Asset) ie bad loans can cross Rs 10 lakh crore by the end of the current financial year. The main reason for this is the problem in repaying the loans given to retail and micro, small and medium enterprises (MSMEs). This was said in a study on Tuesday.

According to a study by industry body ASSOCHAM and rating company CRISIL, “due to difficulty in repayment of loans in the retail and MSME sector and restructuring of some assets, by March 2022, NPAs may increase to 8.5-9 percent.” According to the study, the gross non-performing asset (GNPA) of banks can go above Rs 10 lakh crore by March 2022. It said the current pressure on asset quality is different from the pressure seen a few years back. At that time, NPAs had increased mainly due to default in repaying loans from large accounts.

More likely to sink retail loans

According to the study, this time there is a possibility of problem in repaying loans in small accounts, especially MSME and retail category accounts. However, it has also been said that the debt restructuring scheme announced for MSME and small borrowers should check the huge increase in NPAs. Also, there are investment opportunities in this type of asset for investors looking to invest in stressed assets.

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Shehnaz Ali
Shehnaz is a Corporate Communications Expert by profession and writer by Passion. She has experience of many years in the same. Her educational background in Mass communication has given her a broad base from which to approach many topics. She enjoys writing about Public relations, Corporate communications, travel, entrepreneurship, insurance, and finance among others.

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