Indian banks may withstand next wave of bad loans
From the perspective of an investor, whether equity or debt, the banking system can withstand the next wave
The banking sector went through a bout of pain, starting with the asset quality review in 2015, shooting up of non-performing assets (NPAs), write-offs, the Insolvency and Bankruptcy Code and National Company Law Tribunal (IBC-NCLT) awards, culminating in capital infusion by the government. Capital infusion, ultimately, is public money. Just when the banking sector was recovering, with NPAs coming down from 11.6% as on March 2018 to 8.6% as on March 2020, along came the covid-19 shock. This would have a significantly negative impact on NPAs as almost all borrowers are reeling.