Debt Recovery Guru - Debt Collection India Portal, Latest Indian Credit Industry News , Jobs, Events, Directory

Sunday
Nov 19th
Text size
  • Increase font size
  • Default font size
  • Decrease font size
Home News

News

Banks capable of controlling rising NPA

Reserve Bank Deputy Governor Anand Sinha said banks' asset quality has deteriorated in recent times due to the gloomy economic conditions but noted that there is enough capital with the lenders to take care of the situation.

"Yes, there is pressure on asset quality and at the same time we have enough capital to sustain that," he told reporters on the sidelines of an Economic Times event here.

Emphasising on the need for a better management of the stress in the system, Sinha asked banks to keep away from "controllable" factors.
 
Citing the rise in debt restructuring, he said an analysis of cases by RBI has found that banks have financed highly leveraged corporates, some corporates have open positions in the forex market in spite of cautions from the central bank and there have been diversions from the purpose of loans.

"There are so many controllable factors which can change situation considerably, can soften the blow," he said.

Sinha said debt restructuring is a very legitimate way of dealing with stress but advised banks to be prudent and do it only when needed.

"CDRs (corporate debt restructuring) are on a rise and they do represent the stress in the system. Credit administration needs to be improved so that these things can be controlled," he said.

Net NPAs of the system has crossed over 3.5% in FY12 from 2.3% in the previous year, while the CDR book has crossed 5.7% of the total loan book of banks at the end of the June quarter.

Sinha also advised banks to keep away from the high cost and short-term bulk deposits, especially given the growing wedge between the deposit and credit growth in the system.

On the economic front, he said the recent reform measures will help by reversing the negative sentiments, but added that growth during the fiscal will continue to remain below the trend.

"The domestic growth is expected to remain below its trend level in 2012-13 as well. However, the recent measures taken by the government are likely to reverse the sentiments," Sinha said.

He said the fiscal policy had a lot of headroom, which could make revival in growth possible after the 2008 crisis, but the same headroom has "exhausted" at present.

The Reserve Bank is constrained to not ease rates and prop up growth given the high inflation and the twin deficits on the current account and fiscal front, he said.

PTI
 

FDI to improve bad loan recovery in farm sector

FDI to improve bad loan recovery in farm sector
Batting for FDI in multi-brand retail, a representative body of Cooperative Agriculture Banks Federation has said it (the decision) will help farmers to fetch better retu...

Credit card holder gets compensation worth Rs. 20,000 from HSBC

Hongkong and Shanghai Banking Corporation (HSBC) has been ordered by a consumer forum here to pay Rs 20,000 as compensation to one of its credit card holders for adding h...

Banking industry struggling at the hands of global slowdown

While addressing a seminar on emerging challenges before the Indian banking industry,  K R Kamath, chairman and MD of Punjab National Bank and vice-chairman of Indian Ban...

Why large corporate loans are turning bad

Why large corporate loans are turning bad
Sluggish industrial growth worldwide, high oil and commodity prices, inflation, widening current account deficit, and grave power situation are resulting in many units no...

UBHL auditors concerned over Kingfisher exposure and defaults

New Delhi: Auditors of UB group's holding firm, UBHL, have raised concerns over its significant exposure to debt-ridden Kingfisher Airlines, as also on delays and default...

Reforms too small for sovereign credit benefits: Moody's

Govt seeks to raise Rs 15,000 cr from selling stake in some state-owned cos, but its poor record of divesting stakes in cos suggests high execution risk

Rating agency Mood...

Textile Industry’s debt recast package execution expected in the coming week

In order to help the struggling textile industry bounce back to normalcy, the government in the month of May had announced a debt restructuring package of Rs 35,000 crore...

KFA now fails to pay HPCL

Vijay Mallya’s Kingfisher Airlines has been running into heavy losses and low performance grid. The worst performer for the month of August, Kingfisher Airlines, carried ...
Page 7 of 139

Advertisement

Advertise on Debt Recovery Guru. Check out options by clicking here!

Advertisement

Advertise on Debt Recovery Guru. Check out options by clicking here!

Newsletter

Follow DRG

TwitterFacebookFeed

Polls

How is the Debt Recovery Industry's Reputation in India?
 

Advertisements