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NARC, provision buffers to help banks contain Covid 2 0 damage

NARC, provision buffers to help banks contain Covid 2.0 damage SECTIONS Share Synopsis Asset quality is still a major concern for many Indian banks even as non-performing assets (NPA), on average, could be contained, the global consultancy firm said. Agencies Haircuts on sales to ARCs have risen to 66% in FY20 compared to 62% in the prior financial period, it observed. Establishment of the National Asset Reconstruction Company (NARC), a state-driven bad bank for soured loans, and healthy provisioning buffers against doubtful advances should help India’s high-street banks mitigate the impact of delinquencies and asset-quality slippages in the aftermath of the second Covid wave.

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