Banks Face Fresh Fault Lines On Loans

For the banking sector, just looking to come out of the NPA crisis – gross NPAs fell after seven years, from 11.2 per cent in 2017/18 to 9.1 per cent in 2018/19 – the good news may be short-lived.

- Anand Adhikari

More stress is emerging in agriculture, Mudra small loans, unsecured retail loans and telecom where banks and non-banks have as much as Rs 27-31 lakh crore locked up . The total balance sheet of banks and non-banks is Rs 190 lakh crore, equal to India’s GDP, and any blow-up in these segments could threaten the stability of the financial system as well as the already vulnerable economy.

Arvind Subramanian, former chief economic says the economy is facing a four balance sheet challenge. Non-banks and real estate firms have joined the earlier two villains, banks and infrastructure companies.

MUDRA LOANS