Adverse effects of Corona and Moratorium on banks will be seen in the near future

New delhi date. 31 December 2020, Thursday

Due to the Corona outbreak and lockdown, the loan moratorium will have an adverse effect on banks in the near future, according to the annual report released by the Reserve Bank on the faulty banking system.

According to the report, NPAs of Indian banks fell to 6.5 per cent during the September quarter. But on the other side of this reality, Corona as well as Lone Moratorium will have an adverse effect on banks in the near future. These two issues are likely to worsen the NPA's position.

The loan moratorium introduced during the lockdown benefited 30 per cent of the bank's total borrowers. This activity will adversely affect the banks in the near future.

At present, the real situation of NPAs is not seen in the accounts of banks. Even the impact of the Corona epidemic is yet to be seen on these figures. Some banks have said that Corona could increase the gross NPA of banks from 0.10 per cent to 0.5 per cent.

Thus, given these estimates, it is clear that there will be pressure on the asset quality of banks in the near future. All of these issues will only be realized when the moratorium proceedings.

Thus, in view of this pressure, banks will need additional capital in the near future. In the current financial year, the government has invested Rs. 50,000 crore is to be spent. However, banks will have to raise more capital in the market.

The Corona epidemic will further affect small finance banks, payment banks, co-operative banks and NBFCs. As stated in this report.