Debt recast to give relief to Rs 3 trn retail, small corp debt: Crisil

Agency says RBI move on restructuring will help soften Covid-19 impact on banks' asset quality. Without this, gross NPAs could have touched a two-decade high of 11.5% by March 2021

loans, aum, assets, banks, investment, shares, stocks, funds

The study, covering 14,000 companies that constitute over 75 per cent of the overall corporate portfolio of banks, shows that the debt at risk in corporate loan accounts with exposure less than Rs 500 crore is about Rs two trillion

Abhijit Lele Mumbai
The one-time debt restructuring is expected to provide relief to small corporate and retail loans worth Rs three trillion and help stem a runaway rise in NPAs this fiscal, according to rating agency Crisil.

The Reserve Bank of India (RBI) has permitted relaxations for corporate loans under the June 2019 Prudential Framework on Resolution of Stressed Assets. These will benefit borrowers in most categories.

Crisil said in a statement that the central bank's move on restructuring will help soften the Covid-19 pandemic’s impact on the asset quality of banks. Without this, gross non-performing assets (NPAs) could have touched a two-decade high of 11.5 per cent by March 2021, but will now likely print considerably below that level, Crisil said.

First Published: Aug 10 2020 | 7:43 PM IST

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