A Crisil study says Indian banks would need as much as Rs 3.3 lakh crore in 2017-18 to provide for non-performing assets. “Our estimates show that banks would need to set aside close to Rs 3.3 lakh crore this fiscal, or 50% more than Rs 2.2 lakh crore they provided for NPAs last fiscal,” Crisil said in the report. It cited the eroding value of assets and with resolutions not happenings, banks would be required to step up provisioning, especially because large corporate NPAs. Crisil said it had done an account-by-account analysis of the economic value of assets underlying large corporate NPAs before arriving at the provisioning figure. The report also mentioned that write-downs could be in the range of 25%-75%. The report also said the banks could face a net loss of nearly Rs 60,000 crore in this fiscal with public sector banks bearing the brunt of increase in provisions and the resultant impact on profitability because of their higher stock of NPAs.
