India s Economic Recovery To Reduce Bank Stress, Says S&P Report
Moneylife Digital Team
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An improvement in India s macroeconomic conditions is likely to alleviate stress for the country s banking sector, says a report, titled Banking Industry Country Risk Assessment: India , from S&P Global Ratings.
It says, The Indian government s strong efforts to shield banks from the COVID-19 pandemic have been largely successful, in our view. However, a hit from the pandemic is inevitable. While the Indian economy is on a mend, the permanent gross domestic product (GDP) loss stemming from the brunt of the coronavirus is huge at 10%.
S&P estimates the Indian banking system s weak loans are at 12% of gross loans. It says, credit costs should improve to 2.2% of total loans in the fiscal year ended 31 March 2022, from its estimate of 2.7% for fiscal 2021.