[T.S.R:16677] Shouldnt Banks Get Slammed With Realtors-Afterall RBI Is Propogating A Myth Of Safety By Modifying NPA Norms

Banks-Real Estate-Unholy Nexus Presided Upon By The RBI

 

Padding extended by RBI has allowed Banks to restructure NPA accounts in the last two years. The NPA were given a one year time frame to regularise. The accounts belongs to Airline and Real Estate Industries. The total quantum could be in excess of Rs.25000-35000 cr (rough estimates). The package includes interest and principal repayment moratorium for a year. It is unlikely that the growth in Investable surplus and banking support will be there to bring the required revenues and gains considering the high cost of carrying and existing costing of these companies.

We should expect another change in clasification of NPA by way of a directive by RBI. May be by extending the period of non repayment of principal and non servicing frequency of interest to 6 months / one year. Simply to avoid NPA's , provisioning and losses. Indian banking thus is at the cross roads and may test deep waters again with in the next one year.

 

 

Safe Harbor Statement:

Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.

 

Nothing in this article is, or should be construed as, investment advice.

 

 

 

 

 

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