MUMBAI : Lenders are pinning hopes on the Reserve Bank of India’s (RBI) nod to a loan restructuring scheme for corporates to manage asset quality concerns, as the government has agreed to their suggestion of a loan-guarantee proposal for bad loans.
The scheme, proposed by the lenders under the aegis of the Indian Banks’ Association (IBA) is being considered by the central bank, said two people aware of the development.
They said that bankers have sought the creation of a bad bank which will act in tandem with the debt recast programme, if approved.
Bankers expect asset quality to take a beating once the moratorium ends. Rating agency Crisil estimates that bad loans will rise to 11-11.5% by March 2021 from 9.6% expected for FY20. “While