Banks' stressed assets in retail, MSME segments seen rising in FY22
The COVID-19 pandemic is expected to continue to have a bearing on the asset quality of banks in the current financial year. However, unlike previous years, where the bad loans were led by large corporate accounts, it is the micro, small and medium enterprises (MSME) and retail borrowers who have caused more impact this time around.
The pandemic and the nationwide lockdowns hit MSMEs hard as sales fell and global supply chains were disrupted. Many individuals too had to bear the brunt of salary cuts or even job losses. While the Reserve Bank of India did allow retail borrowers to restructure their loans, the non-performing assets are still likely to go up this year, according to CRISIL.
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