Sinking under loans
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India, July 27 -- The Reserve Bank of India (RBI) Governor, Shaktikanta Das, has a grim warning for our banks. In a worst case scenario, as the Chinese pandemic continues in India, our economy could be pushed into a never before seen recession. As it was already sputtering before the virus struck, banks, which were acutely stressed, might see bad loans possibly touch a fifth of their loan portfolio. The central bank has warned that bad loans could rise to a 20-year high as a result of the pandemic, from 8.5 per cent in March 2020 to 12.5 per cent by March 2021. If the stress is severe, it can rise to 14.7 per cent. This despite the easing measures announced by the Government, including the moratorium on loan payments for both commercial a...
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