Banks' NPAs status to worsen to over 12% by fiscal-end: RBI | WeForNews | Latest News, Blogs Banks’ NPAs status to worsen to over 12% by fiscal-end: RBI – WeForNews | Latest News, Blogs
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Mumbai, June 26: The gross non-performing assets (GNPAs), or bad loans, ratio in the Indian banking system is likely to rise from 11.6 per cent in March 2018 to 12.2 per cent by the end of March next year, the Reserve Bank of India said on Tuesday.

Referring to the 11 state-owned banks under prompt corrective action framework (PCA) on account of NPAs, the RBI, in its Financial Stability Report (FSR), also said these may see a worsening of their GNPA ratio from 21 per cent in March 2018 to 22.3 per cent by the end of the ongoing 2018-19 fiscal.

“Macro-stress tests indicate that under the baseline scenario of current macroeconomic outlook, SCBs’ (scheduled commercial banks) GNPA ratio may rise from 11.6 per cent in March 2018 to 12.2 per cent by March 2019,” it said.

Of the 11 banks, six are likely to experience capital shortfall relative to the required minimum risk-weighted assets ratio (CRAR) of 9 per cent, the central bank said.

The 11 banks under PCA framework on account of their high bad loans are IDBI Bank, UCO Bank, Central Bank of India, Bank of India, Indian Overseas Bank, Dena Bank, Oriental Bank of Commerce, Bank of Maharashtra, United Bank of India, Corporation Bank and Allahabad Bank.

Though the overall system level CRAR may come down from 13.5 per cent to 12.8 per cent during the period in review, the FSR said profitability of all commercial banks had declined partly reflecting increased provisioning on account of bad loans.

“The stress in the banking sector continues as GNPA ratio rises further,” the report said

“Spillover risk from advanced financial markets to emerging markets has increased,” it added.

On the domestic situation, the RBI said economic growth is firming up.

“However, conditions that buttressed fiscal consolidation, moderation in inflation and a benign current account deficit over the last few years, are changing, thereby warranting caution,” the report said. (IANS)

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Extend lockdown period till April 30 to contain Covid-19: CAIT

“Nearly 7 crore small businesses employ another forty crore people and therefore if by any chance the disease starts spreading among the traders of the country, then it will have a devastating effect on the entire nation.”

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Coronavirus india lockdown

New Delhi, April 8 : The Confederation of All India Traders (CAIT) has urged the Centre to extend the lockdown period till April 30 to curb the spread of Covid-19.

Accordingly, CAIT in a letter to Prime Minister Narendra Modi said that it has made this recommendation based on a survey conducted with senior trade leaders of all states.

“Although the traders will be facing several trading, economic and financial challenges, yet in the interest of the Country, the traders are well prepared to extend best services to the nation,” the confederation said in a statement.

“However, whatever decision the Government will take, the trading community across the country will follow the same in letter and spirit,” it said further.

“Even though the economic and financial impact of a continued lockdown may be unbearable, we are hopeful that we will fight back strongly to resurrect our economy and rebuild our resources with due support from the government in the form of a well thought out financial and economic stimulus to the small and medium trading sector.”

The letter said the confederation has undertaken a survey with prominent trade leaders of all states of the country and have come to the conclusion that during these troubled times, “it would be in fitness of things, if the current lockdown period is extended up to April 30, so to negate any prospect of further spreading of COVID-19”.

The letter said that in view of the burgeoning number of cases of Covid-19 in India over the last one week and to add impetus to the Government’s overall effort to combat the disease and prevent community spread, the business community stands with “you in solidarity and whatever the decision, the government takes, the trading community will abide by such decision and follow the same in its true letter and spirit”.

“After this period is seen through and after assessing the ground realities on that day, we should plan a staggered exit and start lifting restrictions if the situation permits. Almost all national leaders of domestic trade have expressed grave health and safety hazards to the retailers because of their incessant exposure to the public at large,” the letter read.

“Nearly 7 crore small businesses employ another forty crore people and therefore if by any chance the disease starts spreading among the traders of the country, then it will have a devastating effect on the entire nation.”

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Business

Goldman Sachs halves India’s FY21 GDP growth to 1.6%

The report, however, said that a strong sequential recovery in the second half of the fiscal year is expected based on three assumptions.

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Goldman Sachs

New Delhi, April 8 : The outlook for the Indian economy looks bleak as the Goldman Sachs has revised its forecast for the country’s real GDP growth rate for the financial year 2020-21 to 1.6 per cent.

In a report, it said that with the spread of the pandemic and the eventual lockdown have resulted in a significant contraction in economic activity.

The outlook has been revised downwards from the previous forecast of 3.3 per cent.

“The 1.6 per cent growth for FY21 would be deeper compared to widely perceived ‘recessions’ India experienced in the 1970s, 1980s, and in 2009. Notably, the global COVID-19 crisis — or more precisely, the response to that crisis — represents a physical (as opposed to purely financial) constraint on economic activity that is unprecedented in postwar history,” it said.

It said that despite the policy support provided so far the nation-wide shutdown, and rising public anxiety about the virus are likely to lead to a sharp deterioration in economic activity in March, and in the next quarter.

The report, however, said that a strong sequential recovery in the second half of the fiscal year is expected based on three assumptions.

First, the 3-week nationwide lockdown, which is expected to be removed only in a staggered fashion, and social distancing measures reduce new infections over the next 4-6 weeks. Second, while the fiscal easing so far has been limited, the expectation is for further fiscal stimulus by the Centr and the states.

“Third, we expect the RBI to continue with its monetary easing policy, along with liquidity infusion measures. While more forceful policy support could present some upside risk, the recovery could further be delayed if the pandemic is not brought under control globally and domestically over the next few months,” it added.

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NAREDCO seeks $200 bn relief for the entire economy

“Since real estate accounts for 6-7 per cent of India’s GDP and employs nearly 10-11 per cent of population, we urge the government to focus on the demand of the developers.”

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NAREDCO

Mumbai, April 8 : Real estate industry body NAREDCO has requested the Centre for $200 billion relief for the entire economy to meet the impact of the Covid-19 outbreak.

NAREDCO said that real estate has been under consistent stress since the last few years and that market dynamics have changed rapidly which has resulted in rising unsold inventories in the country.

“The Covid-19 pandemic has paused the real estate sector while disrupting the businesses across the nation. While the RBI and the Finance Minister have taken several measures to ease the load on consumers’ shoulder, real estate collectively grapples with the impact of the pandemic,” NAREDCO said in a statement.

According to the real estate industry body, in order to keep up with the world economy, the Centre should suspend all NCLT activities for next 6 months considering the downfall of the economy of India.

“The idea is to provide a breathing space to companies who have faced huge losses due to rapidly decreasing stock prices, which has made high net worth companies prone to be taken over by foreign investors, the results of which can be devastating for India,” the statement said.

“Since real estate accounts for 6-7 per cent of India’s GDP and employs nearly 10-11 per cent of population, we urge the government to focus on the demand of the developers.”

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