Lenders should brace themselves for a tough time once the policy support given at the time of the pandemic is withdrawn, the Reserve Bank of India (RBI) said, warning of a deterioration in asset quality.Housing financiers, RBI specifically said in its Trends and Progress report released on Tuesday, could see a substantial impairment in their loans assets because of delays in completion of housing projects, cost overruns and delayed investments by home buyers.“As of end-August, around 40% of outstanding loans of the financial system availed moratorium. The data on gross non-performing assets (GNPA) of banks are yet to reflect the stress, obscured under the asset quality standstill with attendant financial stability implications,” the report, which provides details of the performance of the banking sector during this fiscal and the previous one, said. The GNPA ratios of banks would have been higher in the range of 0.1-0.66% at the end of September if RBI had not allowed banks to delay recognizing stressed loan accounts as non-performing assets, according to an RBI analysis of quarterly results of a sample of lenders. Banks will have to set aside money to cover potential losses once they recognize a loan account… Read full this story
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