ECLG Scheme may have saved around 14% of outstanding loans to MSMEs from becoming NPAs; deeper worries remain on the NPAs this loan segment may generate.
Banks are also likely to face challenges on profitability and solvency even as ICRA has forecast a 15-20-basis point uptick in restructuring requests from the borrowers.
SBI, ICICI and HDFC Bank continue to be domestic systemically important banks or institutions which are 'too big to fail', RBI said.
One of the challenges that RBL Bank’s interim CEO Rajeev Ahuja faces is to instill confidence among retail depositors. In Dec quarter, bank’s retail deposits and deposits for small business customers plunge 11.3% to Rs 27,871 cr.
Delinquencies in consumer finance
portfolio rise; new-to-credit segment shows decline in originations, says RBI’s
Financial Stability Report.
Gross NPAs of banks decline to 6.9% at end-September, the lowest in 5 years. Write-offs the predominant recourse taken by banks, says RBI.
Gross NPAs of banks may rise from 6.9% in September 2021 to 8.1% by September 2022 under baseline scenario and to 9.5% under severe stress scenario, RBI’s Financial Stability Report said.
RBI says financial health of RBL Bank is stable and it is well-capitalised; several brokerages downgrade the stock quoting uncertainty.
RBL Bank interim CEO Rajeev Ahuja says recent developments have nothing to do with financials; trade union body wants government to consider merging it with a state-owned bank.
Ministry of corporate affairs proposes NCLT to have only 30 days to either approve or reject a resolution plan; other changes relate to liquidation, look-back period, avoidance transactions and wrongful trading.
RBI puts growth as its overarching priority but inflation is hurting. A new balancing between growth and inflation may be on the cards next year.
Bank of Maharashtra has also cut interest rate on car loans to 6.80%; becomes first bank to lower rates after RBI maintained status quo in key policy rates for ninth consecutive time.
RBI has left untouched the key lending rate while raising concerns over inflation and the new Omicron variant. "The overarching priority of RBI at this stage is revival of growth,” Governor Shaktikanta Das said.
RBI allows promoters to own up to 26% stake in private banks; no stance taken yet on allowing corporates into banking.
RBI has directed banks not to upgrade NPAs as ‘standard’ asset after getting only interest payment from the borrower.
