In the light of Covid-19s bad influence on trade and business,a RBI report stated that defaulters and Bad debts of Indian banks may shoot-up from 8.5% to 12.5% by the first quarter of 2021.
Governor Shaktikanta Das, in his foreword to the report, had a clear under tone for economic growth, but said once the post-pandemic phase was reached the focus would be on calibrated unwinding of regulatory and other dispensations.
“The challenges that lie ahead have to be addressed with the overarching objective of preserving long-term stability of the financial system, which is critical for nurturing the recovery,” he said.
“It(bad debts) may escalate to 14.7% under a very severely stressed scenario,” the council’s Financial Stability Report released by the Reserve Bank of India said.
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