A TransUnion CIBIL study shows India’s bad debt problem may have peaked in September 2017. The study also shows that the NPA in the total commercial lending portfolio stands at Rs 54,200 billion as of March 2018, the 3 components of bad debt being i) gross NPA (recognized); ii) ‘Unrecognized NPA’, which is standard exposure of borrowers who have a non-trivial portion of their total exposure recognized as NPA by other bank/s; and iii) Irregular exposure belongs to commercial borrowers who are “Special Mention Accounts” (SMA) of various severity or are otherwise overdue or exhibiting over-utilization. Explaining the findings, Satish Pillai, MD & CEO, TransUnion CIBIL, said Indian bureau capability in terms of data quality and big data analytical ability has reached a stage of maturity where it can give precise and accurate reading of banking system risks and future evolution of the banking metrics. The current analysis suggests that the cumulative effort of the RBI, government and banks together are showing early signs of success as the stock of stressed assets and high risk debt is coming down across India’s banking system, he added. “The silver lining is that the overall NPA growth is expected to stabilize post September 2019 with a possibility of declining thereon if there is a strong recovery from identified NPAs,” Pillai said.
