Parliament Panel Says Lag Impact Of Pandemic May Fuel Bad Loans

New Delhi: Asking the federal government to chorus from exhibiting "any early euphoria" on discount in non performing belongings (NPAs) of banks, a Parliamentary panel has mentioned that as a consequence of some "lag impact" of the Coronavirus pandemic, there might be a rise in dangerous loans.The standing committee on finance in its report which was tabled in Parliament as we speak, famous that although the banking system seems to have weathered the pandemic shock properly with respect to NPAs, "(the committee) would like to caution against any early euphoria on this count, as there may still be some lag impact of the pandemic for the banking sector".It additional mentioned that absorbing extra liquidity that was injected as a part of the pandemic response to stimulate the financial system is critical, as there could also be a risk of a rise in NPAs.The panel was of the view that prudence remains to be required and the steps taken by the federal government to cut back NPAs and to impact restoration needs to be continued with the identical vigour.The committee was knowledgeable that opposite to RBI's Financial Stability Report projections of the gross NPA ratio of business banks rising from 7.48 per cent in March 2021 to 9.8 per cent by March 2023, the NPA figures on the gross degree for public sector banks have decreased from 9.11 per cent as on March 31, 2021, to 7.9 per cent at end-December, 2021.