Das warns of higher NPAs, bank capital erosion

#GS2 #Economy

  • RBI Governor Shaktikanta Das on Saturday warned that the economic fallout from the COVID­19 pandemic would likely result in an increase in bad loans across banks, and added that a recapitalization plan was urgently needed to ensure financial stability.
  • The economic impact of the pandemic — due to lockdown and anticipated post lockdown compression in economic growth —may result in higher non­performing assets and capital erosion of banks. 
  • A recapitalization plan for PSBs and private banks has, therefore, become necessary
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