India’s banking system is now well-capitalised with NPA ratios down, because of a collection of capital infusions, asset gross sales, steadiness sheet provisioning and regular nominal development, chief financial advisor Anantha Nageswaran mentioned on Friday.
Referring to the so-called “twin balance sheet problem” that began within the early years of the brand new millennium, he mentioned whereas it let the conomy develop at excessive charges for a couple of years to 2008, additionally sowed the seeds of subsequent slowdown.
Corrective steps taken since might have slowed development however made the monetary system stronger. “(The capital adequacy ratio) of Indian banks is on a par with peers in many developed and developing countries. When current uncertainties dissipate, this is is going to stand us in good stead to expand balance sheets once again,” Nageswwaran mentioned on the FE Modern BFSI Summit right here.
“In the last three months non-food credit growth is running at double digits. While that’s a good sign, the bulk of the loans is going to micro and small enterprises and personal loan segment. Large enterprises naturally are still cautious and in the past they had other avenues of borrowing as well. Therefore, the state of the banking system is that the pandemic shock has been weathered by them. Some lagged impact might be in the pipeline, but provisioning should address that.”
Source: www.financialexpress.com”