MUMBAI : Private sector lenders are using the covid-19 pandemic to build a war chest of provisions that would come handy in cushioning against future asset slippages.
Axis Bank has pegged its covid-19 provisions at ₹3,000 crore, while ICICI Bank said it has set aside ₹2,725 crore in the March quarter and HDFC Bank has made additional provisions of ₹1,550 crore.
The Reserve Bank of India (RBI) has asked banks to set aside 10% of those outstanding loans for which a three-month moratorium on repayments was provided.
This has to be done in two tranches of 5% each in the March and June quarters. HDFC Bank has created a good credit buffer to be able to withstand a shock, anticipating that things will start to normalize around May or June, said