INSUBCONTINENT EXCLUSIVE:
Rs 35,000 crore estimates Brickwork Ratings.
The rating agency has said that these new norms could severely pinch banking sector
profitability for fiscals 2020 and 2021 and flagged that banks ability to manage asset quality in the near term post the moratorium period
remains a critical monitorable.
Keeping in mind the risk build-up in bank balance sheets due to stress and delays in recoveries, the
regulator has asked banks to make a higher provision of 10 per cent on all standstill accounts
The provision will be spread across the March and June quarters and can be later adjusted against the provisioning requirements for actual
sector banks many of which continued to report losses for 9 months ending 31 December, 2019 and may necessitate further capital infusion by
the government into weak PSBs.