Sluggish loan growth, low other income, and delayed resolution of stressed assets maylead to a precarious financial position for public sector banks (PSBs) duringthe December quarter of FY21 (Q3FY21), caution analysts. "We estimate weakness to continue in PSBs, barring State bank of India, impacted bysluggish loan growth, a higher proportion of MSME/SME loans, and delay in theresolution of stressed accounts," said analysts at Motilal Oswal FinancialServices (MOFSL) in a sector report. Those at Emkay Global, on the other hand, say that the Supreme Court's stay on NPA tagging remains an irritant in Q3, and may lead to optically elevated proforma slippages due to the spill-over from Q2FY21. That said, overall NPA formation, as well as restructuring proposals, are meaningfully lower than expected though one needs to be watchful of the tail-end risk, it added.