July 17: The Reserve Bank of India (RBI) could be mulling over putting bad loans of up to Rs 8 lakh crore for resolution by March 2019, and this could a move that could help bring down non-performing assets (NPAs) to acceptable levels. Further, it could improve the financial health of banks as well, an Assocham study has said.
As per the study, a large part of the NPA mess could see itself being resolved by the first quarter of the 2019-20 fiscal. Assocham believes that this could get aided by factors such as turnaround in the economic cycle, and also measures taken by the government and RBI to see an end to the bad assets imbroglio.
The study titled NPAs Resolution: Light at the end of tunnel by March 2019, also felt though the NPAs could be ushered in to the resolution platform, it would depend on how fast they would fade away from the banks’ balance sheets.
Banks as of now are battling the problem like never before. Statistics reveal that as many as 27 PSBs collectively made an operating profit of Rs 1.5 lakh crore in 2016-17, but after allowing for the provisioning for bad loans, among others, net operating profit slipped to a paltry Rs 574 crore.