There are, however, also some incipient signs of stress in the form of shrinking net interest margins & build-up of bad loans in retail segment that need to be monitored.
Indian banks, regulators, and investors weren’t worried when crises began exploding in US and European banks earlier this year. This resilience has been a long time coming.
While bank credit looks healthy, there are signs of stress. Pvt investments show green shoots but merchandise exports are contracting. Foreign investors continue to find India attractive.
It is crucial for banks and other financial institutions to conduct regular stress tests against known market risks, including inflation and interest rate risks, writes Atul.
World Bank’s India Development Update does, however, say that inflation will ease, and that strong services exports will mitigate some external factors expected to slow growth.
While commercial banks wrote-off Rs 10.09 lakh crore in last five financial years, they have recovered only Rs 1.32 lakh cr — a shade over 13% — from these written-off accounts.
Companies increasingly looking to raise funds from market, while banks focus more on personal loans. Reasons for shift include NPA crisis & higher trust among households, say experts.
National Asset Reconstruction Co. Ltd (NARCL) is awaiting RBI’s nod. It aims to free up bank resources for lending to productive sectors of the economy.
Nine bank unions collectively gave a strike call for 15-16 March to protest against privatisation of two state-owned banks, a move govt had announced under its disinvestment plan.
India urgently needs a range of entities to solve for the vast diversity in its credit intermediation requirements, including in infrastructure financing.
With an educated & skilled workforce, Tamil Nadu has a burgeoning industrial sector which has scored massive investments in automobiles, electronics, and even footwear.
The ‘idea’ Kejriwal's politics grew around was a no-holds-barred fight against corruption. That is the reason Modi govt has now tarred him and his entire party with the same paint.
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