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Forbearance masking bad loans emanating from covid-19 distress, says S&P
₹26,000 crore, data compiled by Mint showed.In fact, collection rates, which improved sharply in the second quarter to an average 95%, may also wane, S&P said.“This trend is aided by the pickup in economic activity since lockdowns ended and, in many cases, by the financial savings of the borrowers. Given that overall economic activity levels remain soft, savings could deplete fast, potentially hurting future collections," it said.According to the rating agency, since RBI has allowed a one-time restructuring of loans, slippages could decline in the current fiscal year, but it may delay recognition to the next year or so.