{"id":31729,"date":"2018-10-29T11:01:39","date_gmt":"2018-10-29T05:31:39","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=31729"},"modified":"2018-10-29T11:01:39","modified_gmt":"2018-10-29T05:31:39","slug":"bad-loans-shrink-from-record-peak","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/bad-loans-shrink-from-record-peak\/","title":{"rendered":"Bad loans shrink from record peak"},"content":{"rendered":"<p><strong><a href=\"http:\/\/www.thehindu.com\/business\/bad-loans-shrink-from-record-peak\/article22530615.ece\">Bad loans shrink from record peak<\/a><\/strong><\/p>\n<p><strong>Context<\/strong><\/p>\n<p>India\u2019s stock of soured bank\u00a0loans\u00a0shrank slightly in the quarter to September last year, the first pullback since a drive to clean up record levels of bad debt began in 2015 and signalling that tighter rules and a new bankruptcy code may be starting to show results.<\/p>\n<p><strong>Regulator\u2019s clean-up drive, tighter rules helping; overdue loans ease in Sept.<\/strong><\/p>\n<p>Stressed loans \u2014 which include non-performing as well as restructured or rolled-over loans \u2014 eased 0.4% from three months earlier to \u20b99.46 trillion ($148.3 billion) at the end of September, according to unpublished central bank data reviewed by Reuters.<\/p>\n<p><strong>First decline since 2015<\/strong><\/p>\n<p>That would be the first decline in soured assets since at least 2015, according to quarterly data collected by Reuters.<\/p>\n<p><strong>Stressed assets increased steadily<\/strong><\/p>\n<ul>\n<li>On an annual basis, stressed assets have risen steadily since the year to March 2006<\/li>\n<li>Banks have seen their soured loans nearly double in the past four years as a prolonged economic slowdown took its toll on the ability of companies to repay debt<\/li>\n<li>Profligate lending and poor due diligence have also been blamed for the surge<\/li>\n<\/ul>\n<p><strong>Asset quality review<\/strong><\/p>\n<p><strong>Steps taken<\/strong><\/p>\n<p>In late 2015, the Reserve Bank of India (RBI) began a major asset quality review amid allegations that banks were hiding the extent of the bad debts on their books.<\/p>\n<p><strong>Banks reform program: <\/strong>The central bank last year ordered banks to push some 40 of the country\u2019s biggest corporate defaulters into bankruptcy proceedings through greater powers given to it as part of the government\u2019s\u00a0banking\u00a0sector reforms programme<\/p>\n<p><strong>Recapitalisation program: <\/strong>The government has also announced a $33 billion recapitalisation of the state-run banks that account for the bulk for the soured loans.<\/p>\n<p><strong>First batch of capital<\/strong><\/p>\n<p>The government on Wednesday announced the first tranche of the capital injection programme, pledging to inject nearly $14 billion into 20 state banks by March.<\/p>\n<p><strong>Also eased<\/strong><\/p>\n<p>Loans that had been overdue for between 60 days and 90 days, and are at the highest risk of default, also eased to \u20b91.53 trillion rupees as of end-September, from \u20b91.63 trillion rupees at end-June, the data showed<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Bad loans shrink from record peak Context India\u2019s stock of soured bank\u00a0loans\u00a0shrank slightly in the quarter to September last year, the first pullback since a drive to clean up record levels of bad debt began in 2015 and signalling that tighter rules and a new bankruptcy code may be starting to show results. Regulator\u2019s clean-up&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/bad-loans-shrink-from-record-peak\/\">Continue reading <span class=\"screen-reader-text\">Bad loans shrink from record peak<\/span><\/a><\/p>\n","protected":false},"author":61,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[555],"tags":[],"class_list":["post-31729","post","type-post","status-publish","format-standard","hentry","category-test-1","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704777744},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/31729","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/61"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=31729"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/31729\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=31729"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=31729"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=31729"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}