‘Banks to face earning pressure for at least 2 yrs’
   Date :03-Jul-2020

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INDIAN banks may continue to face heightened asset quality and earning pressure for at least two years, as disruption to business activity and supply chains and shrinking personal incomes damage banks’ balance sheets, according to a report by Fitch Ratings.
 
The reported performance of Indian banks for the financial year ended March 2020 does not adequately reflect the incipient stress caused by the pandemic, the rating agency said in the report titled ‘Indian banks vulnerable to pandemic related stress.’
 
“Bank balance sheets are yet to feel the impact of India’s strict lockdown measures that were implemented by the Government from March 25. Moreover, a meaningful short-term recovery looks unlikely, as the acceleration of new COVID-19 cases threatens the gradual reopening of the economy,” it said. The impaired loan ratios of Indian banks fell during 2019-20.