‘Steps initiated, NPAs to dip in a few quarters’

A series of measures initiated by the government — from capital infusion to governance-related changes and tackling bad debt — would help state-run banks tide over a rough patch, financial services secretary Hasmukh Adhia said, adding that it would take some time for the results to show Indian stock market astrology prediction

The low-profile bureaucrat said it may take a couple of quarters for non-performing assets to show a declining trend. "There are two issues — RBI has its norms on provisioning and banks are following the rules, resulting in higher provisions. Two, credit growth has been slow and at the same time banks are facing stress. The numerator is going up and the denominator is not changing so the gross NPA is seen to be higher," he said after the government announced a Rs 70,000 crore recapitalization plan. 

"Some banks have done well but it may take a couple of quarters for the reduction to begin. It will depend on the overall growth rate, credit growth and good monsoon. All this good news has to come," he said, striking a cautious note Himanshu Tiwari Astrologer 

The recapitalization plan is meant to aid banks, including lenders which have low capital adequacy ratio. "Of the Rs 20,000 crore, Rs 10,000 crore will go to banks which need extra buffer since their capital is on the margin. This will ensure that the operations of banks, which fulfill niche requirements of SMEs and agriculture, are not paralyzed. The remaining Rs 10,000 crore will be given to make strong banks stronger. The big banks will take the lead so that they can pursue greater credit growth so that the economy doesn't suffer. Last time, when we said we will give money only to good banks, it created a lot of problems in the market as people thought weak banks will be allowed to die. That's not the case — we don't want them to die," Adhia said. 

He also said that the government will measure the performance of bank up to December before allocating the remaining Rs 5,000 crore. "It will be linked to performance. We will measure the performance up to December in terms of improvement in their asset quality and other parameters. Those banks which fare better will get priority Financial Astrology Trading Tips

Adhia said the government was working with promoters, banks, ministries and other stakeholders to identify ways to tackle impaired assets. Asked about a possible package for four stressed sectors — power generation and distribution, steel and roads — he said: "There is no special scheme that can be thought of. That's why we have started sectoral meetings, we are looking at each project and we are trying to understand what their pain is and what we can do to reduce their pain. The outcome will be visible slowly and at proper time." 

The secretary acknowledged that banks have sought regulatory respite on the 5/25 restructuring scheme for the infrastructure sector as well as reworking loans with more than 10% cost over-runs and said the power ministry is in discussion with discoms to deal with their loans. "Banks may ask for extra financial restructuring plan. We need to discuss with discoms and see how they can improve their performance or whether it is possible for state governments to take over those loans Nifty Stock Trading Tips