Kerala: LDF's Mani Kappan wins Pala bye-polls; first defeat for Cong in 54 yrs

Munbai/New Delhi, May 4: India expects bad debts at its banks could double after the coronavirus crisis brought the economy to a sudden halt, a senior government official and four top bankers said.

Indian banks are already grappling with 9.35 trillion rupees ($123 billion) of soured loans, which was equivalent to about 9.1% of their total assets at the end of September 2019.

"There is a considered view in the government that bank non-performing assets (NPAs) could double to 18-20% by the end of the fiscal year, as 20-25% of outstanding loans face a risk of default," the official with direct knowledge of the matter said.

A fresh surge in bad debt could hit credit growth and delay India's recovery from the coronavirus pandemic.

"These are unprecedented times and the way it's going we can expect banks to report double the amount of NPAs from what we've seen in earlier quarters," the finance head of a top public sector bank told Reuters.

The official and bankers declined to be named as they were not officially authorized to discuss the matter with media.

India's finance ministry declined to comment, while the Reserve Bank of India and Indian Banks' Association, the main industry body, did not immediately respond to emails seeking comment.

The Indian economy has ground to a standstill amid a 40-day nationwide lockdown to rein in the spread of coronavirus cases.

The lockdown has now been extended by a further two weeks, but the government has begun to ease some restrictions in districts that are relatively unscathed by the virus.

India has so far recorded nearly 40,000 cases of the coronavirus and more than 1,300 deaths from COVID-19, the respiratory disease caused by the coronavirus.

'RIDING THE TIGER'

Bankers fear it is unlikely that the economy will fully open up before June or July, and loans, especially those to small- and medium-sized businesses which constitute nearly 20% of overall credit, may be among the worst affected.

This is because all 10 of India's largest cities fall in high-risk red zones, where restrictions will remain stringent.

A report by Axis Bank said that these red zones, which contribute significantly to India's economy, account for roughly 83% of the overall loans made by its banks as of December.

One of the sources, an executive director of a public sector bank, said that economic growth had been sluggish and risks had been heightened, even ahead of the coronavirus crisis.

"Now we have this Black Swan event which means without any meaningful government stimulus, the economy will be in tatters for several more quarters," he said.

McKinsey & Co last month forecast India's economy could contract by around 20% in the three months through June, if the lockdown was extended to mid-May, and growth in the fiscal year was likely to fall 2% to 3%.

Bankers say the only way to stem the steep rise in bad loans is if the RBI significantly relaxes bad asset recognition rules.

Banks have asked the central bank to allow all loans to be categorized as NPAs only after 180 days, which is double the current 90-day window.

"The lockdown is like riding the tiger, once we get off it we'll be in a difficult position," a senior private sector banker said.

New Delhi, Jan 5: Senior Congress leader P Chidambaram on Sunday sàid it was "shameful" that Sadaf Jafar, SR Darapuri and Pavan Rao were arrested by the Uttar Pradesh Police for violence without any evidence against them.

He also said that it was a shocking admission by the police that there is no evidence of their involvement.

"Sadaf Jafar, S R Darapuri and Pavan Rao Ambedkar released on bail after police ADMITTED no evidence of their involvement in violence. Shocking admission," he said on Twitter.

"If that were so, why did the police arrest them in the first place? And how did the Magistrate remand them to custody without looking at the evidence," he asked.
"The law says 'find evidence, then arrest'. The reality is 'first arrest, then search for evidence'. Shameful," Chidambaram tweeted.

Thiruvananthapuram: Kerala activist Rehana Fathima has been asked to take compulsory retirement from BSNL after she was embroiled in Sabarimala row.

Stating that her attempt to enter the shrine of celibate god in 2018 had spoiled the reputation of the company among customers, the BSNL, in its order asked her to take compulsory retirement, further claiming that her acts were “subversive of discipline and amount to misconduct”.

She was suspended from service following her arrest in November 2018 over Facebook posts.

Fathima, who is a technician with the state-run communications company, said she will explore legal remedies against the order sent by her employer.

The Fathima hit headlines when she attempted to enter the Sabarimala shrine, which has traditionally been closed to women in the age group of 10-50 years.

She did after the Supreme Court order allowing entry of women in the age group of 10-50.