Economy

‘Loan rejig, other steps to save PSBs from shock’

Loan restructuring and other measures announced by the government to help the industry hit by the pandemic may save public sector banks from ‘shock’ in the next year, a top Finance Ministry official said.

Despite the pandemic, the lockdown and the consequent damage done to the economy, there are quick signs of recovery, Financial Services Secretary Debasish Panda told PTI.

“There is a steady uptick in the credit growth. Retail, home and agriculture loans are doing well, and MSMEs again, with the intervention of the government through the ECLGS and other similar schemes, have also picked up,” he said.

Mr. Panda added that with the window for restructuring now made available by the RBI through the COVID-19 resolution plan, which offers resolution for all kinds of loans,, the impact may not be that severe as had been projected earlier. However, it was difficult to exactly predict the numbers, he said.

“We don’t anticipate a big shock going to hit public sector banks (PSBs) next year, on account of high provision coverage ratio, steady decline in non-performing assets (NPAs), and one-time restructuring of loans, among other things,” Mr. Panda added.

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Printable version | Apr 23, 2021 1:59:18 PM | https://www.thehindu.com/business/Economy/loan-rejig-other-steps-to-save-psbs-from-shock/article33419747.ece

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