Govt support will only help banks meet regulatory requirements: Moody’s
Centre will have to inject capital into banks whenever they face stress, straining its own finances, the rating agency said
New Delhi: Moody’s Investor Service on Tuesday said the government’s capital support plan for banks will only be enough to meet regulatory requirements, and stress still remains for the sector.
Without reforms, the government will have to inject capital into banks whenever they face stress, straining its own finances, the rating agency added.
The banking sector is grappling rising non-performing assets, which touched ₹ 8.99 trillion or 10.11% of total advances as of 31 December 2017. Of the gross NPAs, the public sector banks accounted for Rs 7.77 trillion. The rising number of banking frauds has also become a serious cause of concern.
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