New Delhi: Due to the ongoing economic slowdown in the country, banks already struggling with NPAs can now incur a huge loss of Rs 2.55 lakh crore. If economic activity does not pick up in the coming three years, then corporate houses may lose 4 per cent of the bank’s total outstanding, which is close to Rs 2.54 lakh crore. In fact, if the business does not expand due to the recession, then the companies will not be in a position to repay the loan and in the end the banks may have to bear the consequences.
According to a study done by India Ratings and Research on 500 private companies, they have to repay debt of about Rs 10.5 lakh crore and it is challenging. It is clear that repaying the bank money will be a big challenge for the lending companies. About 500 companies have outstanding debt of Rs 39.28 lakh crore, of which Rs 7.35 lakh crore is the default amount. The total loan given by banks to the corporate sector is Rs 64 lakh crore.
Arindam Som, analyst at India Rating and Research, said, “The problem is that corporate houses are not able to increase productivity from the fund.” Productive assets in the system have declined sharply and due to this the funds raised from banks are going into losses. This has severely affected the corporate governance standard. ”Let us state that GDP growth in the third quarter of 2019-20 fiscal year has been 4.7 per cent. India Ratings forecast economic growth to be 5.5% for 2021. Now if the GDP growth actually comes down to 4.5 per cent in the financial year 2021-22, then the possibility of getting into debt crisis will also increase.
