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Post the pandemic phase of Covid, PSBs have moved into a high-growth orbit, with record profits and improvement in asset quality, which perhaps has renewed investor interest in them. Many PSB stocks have emerged as star performers, beating their private sector counterparts.
The government and policy-makers keep reiterating that writing off a bad loan does not mean the bank cannot recover it. When a bad debt is written down, some bad loan value remains as an asset because the lender expects to recover it. But it hardly happens. Especially for public sector banks (PSBs), the recovery from bad loans written off is relatively low. If fact, according to information provided by the Union government in Parliament, from FY17-18 to FY21-22, all scheduled commercial banks (SCBs) recovered just 13% of the loans written off.
Non-banking?finance?companies (NBFCs) may see an improvement in their bad loans?ratio by as much as 150-200 basis points,
HFCs to witness better growth prospects, revival in profitability in FY 2023: ICRA
Covid 2.0: Can RBI afford to announce another loan moratorium if situation worsens? With the economic situation deteriorating again in the wake of the second Covid-19 wave, unemployment could rise sharply. In such a scenario, can the RBI afford to announce another moratorium on loan repayments as a relief measure? Here's all you need to know: advertisement UPDATED: April 10, 2021 00:26 IST The moratorium on loan repayment announced by the RBI last year had provided relief to lakhs of small businesses and individuals during the stringent nationwide lockdown. (Photo: Reuters/Representational im...