Bank of Baroda does not think so. In fact, the public sector lender gave a rather hopeful guidance in its post earnings conference call today.The bank’s management believes that moratorium should not be taken as a proxy of stress.
The lender draws its confidence from the fact that many borrowers who opted for renegotiations on payment schedules quickly came back to regular repayment timelines within two months.
Bank of Baroda upgraded ₹1500 crore worth of loans that had the benefit of forbearance in terms of being labelled as bad. The bank said that although 65% of its loan book is under moratorium, this ratio would drop to 35% by August.To be sure, Bank of Baroda’s peers too have suggested a decline in the moratorium ratio.
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