Close to Rs2.3cr loans may turn bad

A senior financial analyst in the country forecasts that about Rs2.3 trillion of corporate loans will slip into bad loans in the next 12 to 18 months.

Udit Kariwala, a senior analyst for financial institutions with India Ratings and Research said in a TV channel interview that his study found that around 2-2.5 per cent of banking sector credit amounting Rs2.3 trillion could turn bad in the next 12-18 months.

‘’ This is purely from the corporate book and it does not include the agricultural and retail stress,’’ he added.

He also said the ‘’meaningful recovery’’ of bad loan has not been taking place despite the claim by the Central Bank and lenders.

Recoveries could not be heavy, he said adding that more provisioning for the bad loans across sectors could be required.

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