Rs3.2 trillion debt will turn into potential slippages in next 12 months: report

Banks will require Rs 91,000 crore of tier one capital by March 2019 to grow at minimum pace of 8-9% on average, according to the India Ratings and Research


In a report , the rating agency maintained stabled outlook for large public sector banks and private sector banks on the back of better access to capital. Photo: AFP
In a report , the rating agency maintained stabled outlook for large public sector banks and private sector banks on the back of better access to capital. Photo: AFP

Mumbai: Out of Rs 83 trillion stressed corporate debt at the end of the September quarter, close to Rs3.2 trillion will turn into potential slippages in the next 12 months, India Ratings and Research said.

In a report on Wednesday, the rating agency maintained stabled outlook for large public sector banks and private sector banks on the back of better access to capital. However, it has retained negative outlook on mid-sized and smaller public banks with weak capitalization and large stock of aging non-performing loans.

According to the rating agency, banks will require Rs 91,000 crore of tier one capital by March 2019 to grow at minimum pace of 8-9% on average. This includes Rs 20,000 crore infusion promised by the government by fiscal year 2019 under the Indradhanush programme.

Telecom sector which contributes 6% of stressed bank debt at the end of December quarter has the highest portion of unrecognized stress.

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