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Negative outlook by Fitch; crisil predicts rise in NPAs: Rating agencies raise red flag on banks' performance
Rating agencies have warned the struggling banking sector on its deteriorating performance, especially the weak capitalisation, financial performance and rising non-performing assets (NPAs). Crisil has estimated the bad loan ratio to rise by 1 percentage point to 10.5 per cent by March 2018. These are unlikely to stress bank balance sheets the way large corporate NPAs did, said Gurpreet Chhatwal, President, CRISIL Ratings. Banks are better placed here because exposures are spread across industries and not as chunky as corporate loans.
Stressed assets in banking system at Rs 11.5 lakh crore: Crisil
Ratings agency Crisil has estimated stressed assets in the banking system to be around Rs 11.5 lakh crore, or nearly 14 per cent of the total advances, and does not expect this number to increase significantly over the medium term. About two-thirds of the overall stressed assets in the banking system has already been recognised by banks as non-performing assets (NPAs) as on March 31, 2017.
NPAs to touch 10.5% by March as banks recognise entire stress: Crisil
Crisil Ratings today said banks have only recognised two-thirds of their stressed loans as non-performing assets, and estimated the bad loan ratio to rise by 1 percentage point to 10.5 per cent by March 2018. The 9.5 per cent NPA figure for March 2017 includes only two-thirds of the overall stressed assets. With the majority of stressed assets now recognised as NPAs, rest of the corporate loan portfolio of banks can be expected to perform better over the medium-term, Crisil president Gurpreet Chhatwal said.
NPAs to touch 10.5 per cent by March as banks recognise entire stress
Crisil Ratings on Thursday said banks have only recognised two-thirds of their stressed loans as non-performing assets, and estimated the bad loan ratio to rise by 1 percentage point to 10.5 per cent by March 2018. The 9.5 per cent NPA figure for March 2017 includes only two-thirds of the overall stressed assets. Faster resolution of stressed accounts through the Insolvency and Bankruptcy Code and various structuring schemes, is critical to improving the asset quality of banks, the agency said.

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