Loan moratorium will increase banks' troubles, NPAs of 5 big private banks will double

-

New Delhi, 12 July 2020 Sunday

The facility of loan moratorium implemented to meet Covid-19 could cause trouble for banks. According to a report released by India Ratings, the non-performing assets (NPAs) of the country's five largest banks could rise by more than five per cent due to a decline in loan disbursements due to net interest margins and moratorium. These include HDFC Bank, ICICI Bank, Axis Bank, Kotak Mahindra Bank and IndusInd Bank. These five banks have a 25% stake in the entire banking sector and a 75% stake in the private banking sector.

The report predicts that the NPAs of these banks may increase from 2.7 per cent in FY20 to close to 5 per cent in the current financial year. In FY19, the NPA of these banks was 2.3 per cent. According to the report, the increase in NPAs may be small, but refinancing will be a challenge again. As demand for loans dwindles, banks are investing their excess liquidity in low-return options. These include government bonds and well-ranked corporate securities.

According to the report, the deposit growth of these 5 banks has been 18.8 per cent in FY20. It was 18.5 per cent in FY19. There, the loan growth rate during this period has come down to 15 per cent from 19.1 per cent. In addition, in the last six months, the RBI has added Rs 1.7 lakh crore in liquidity to the banking system.

The report predicts that the Kovid-19 epidemic will have a devastating effect on the banking sector's GDP. This will put a strain on the economy. In addition, banks have invested a large portion of their excess liquidity in reverse repo rates. The reverse repo rate has fallen by 215 basis points to 3.35 per cent in the past one year. In addition, the cost of funds has been reduced by 5 to 6 per cent. This can lead to negativity.

Comments

Post a Comment

Popular posts from this blog

Covid-19 effect: Significant increase in demand for second hand cars in the country

-
Image
Mumbai, May 26, 2020, Tuesday As lockdowns are being phased out across the country, the use of private vehicles using public transport to reach their destinations is on the rise. The increasing use of private vehicles has also increased the demand for cars, especially secondhand cars. Demand for second-hand cars is unprecedented. Inquiries for second-hand cars have almost doubled during the lockdown period compared to the time before the lockdown, according to a survey of about 100 dealers and car buyers. Demand for used cars at dealers has been strong in the last few weeks, and is expected to grow as the lockdown eases. Consumers are increasingly interested in buying second-hand cars, especially smaller ones, due to lower income levels and health-related safety, said an organized second-hand car dealer. Inquiries for a particular vehicle, which used to be around 15 per cent before the lockdown, have now doubled to 5 per cent. Inquiries for new vehicles have fallen from 21 per cen...
Read more

Information about soymilk and casein products

-
Image
- Industrial guidance - Dhiru Parekh Soymilk: Soybeans are converted to high-quality protein. So that high quality drinks can be made which can be easily digested. There is no difference between soymilk and cow's milk. So the conservative industries of milk processing are now using this milk to make yogurt and ice cream. Consumers also cannot tell the difference between ice cream made from cow's milk and from soy milk. Also, the production capacity of soy milk can be increased than that of cow's milk. And the price can be cheaper. Soybeans mainly contain two types of enzymes that are inactivated in the soymilk process. Leukoxidase that catalyzes the oxidation of fatty acids. And enzymes like pepsin, trypepsin are included in it. Which helps in digesting protein. Soyamilk powder manufacturing process: This is an electric pre-heater system. which basically allows fluid to flow easily in a stationless tube under low-voltages. which absorbs the energy flowing through the Ja...
Read more

Due to the ban, employment and economic activity declined by two to three percent

-
Image
New delhi date. October 7, 2019, Monday A new study has found that employment and economic activity have declined by two to three percent due to the ban. A similar situation has been observed in bank lending. The study found the decline to occur within two months of the notation announced on November 7. This is the first research on demineralization in which data on the effects of districts across India were collected. In addition to the districts, the effect of national level was also studied. Previous studies only examined the national level effect of demonitization. Thus, a full estimate of the overall effect is not known. As a result of the shortage of cash arising out of the blockade, the country's economic activity fell by approximately 8 percent in November-December 2 In the October-December period, bank credit has seen an impact of around two per cent. Cash pulls have impacted demand for a short period. The study found that there was a strong link between money and pro...
Read more