Breaking News

You are here » Indian-Commodity  :  Economy  :  High quantum of NPA may restrict bank credit growth to 8% in FY19: ICRA

04-May2018

High quantum of NPA may restrict bank credit growth to 8% in FY19: ICRA

The credit ratings agency, ICRA in its latest report has said that the high quantum of non-performing asset (NPA) will restrict the overall bank credit growth to a moderate 7-8% in fiscal 2018-19, despite recapitalisation of public sector banks (PSBs) and private sector players upping their game with a 25 percent credit growth. It also said that India Inc will borrow more from cheaper sources abroad. 

ICRA also expects the external commercial borrowings (ECBs) to go up to $27-32 billion in FY19, on the back of recent relaxation in ECB norms by the Reserve Bank of India (RBI) and the high rate of borrowing domestically. It pointed out that the actual ECB inflows would be driven by the all-in-cost of ECBs remaining competitive in relation to domestic sources. It noted that improved ECB inflows would help to finance the larger current account deficit, which may support the rupee in the short-term.

According to the report, that the state-run banks' problems will stem from the high provisioning needed for bad assets and the need to meet mandated capital requirements. It also said that with the relaxation in ECB norms offering an alternate avenue for corporates' borrowings, the credit demand pressure on the domestic banking system and the bond market would ease, which would consequently reduce the upward pressure on domestic interest rates.


Related News

View all news

Number of people filing tax returns may double during 5 years of present government: Jaitley

Finance Minister Arun Jaitley has said that the number of people filing tax returns in India is likely to double to 7.6 crore during 5 years of present government due to initiatives like rationalisation......

Cabinet may soon approve proposed new industrial policy: Prabhu

Commerce and Industry Minister Suresh Prabhu has said the Union Cabinet may soon approve the new industrial policy that aims at promoting manufacturing, attracting investments and creating jobs. He also......

India's manufacturing sector outlook to remain positive for Q2FY19: FICCI

With higher production in manufacturing, Federation of Indian Chambers of Commerce and Industry (FICCI) in its latest quarterly survey has stated that the outlook for India's manufacturing sector is positive......

Top News

View all news

Shalimar Paints lays down foundation of Nashik manufacturing plant

Shalimar Paints has laid down the foundation of a manufacturing unit to be rebuilt in Nashik, in the state of Maharashtra. The company set to commence operations by April 2019 with a planned production......

Delta Corp reports 11% rise in Q2 consolidated net profit

Delta Corp has reported results for second quarter ended September 30, 2018.The company has reported over 2-fold jump in its net profit at Rs 63.51 crore for the quarter under review as compared to Rs......

PNB plans to sell non-core assets worth Rs 8,600 crore during FY19

Punjab National Bank (PNB) has recognized various assets, including its housing finance arm, for sale and hopes to realise Rs 8,600 crore from these non-core assets during the current fiscal. Meanwhile,......