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Some Bad News about Banks in India

Posted by drgorg on November 24, 2009 at 11:18 AM

Credit Targets Are felt to be on a Higher Side


The credit growth situation in the country continues to deteriorate, the pace of growth in October is at a 12 year low of 9.5%. India Inc isn't spending and indirect tax and excise collections, the biggest macro indicators of economic activity, have dropped 20%.


 

According to Rupa Nitsure, Chief Economist, Bank of Baroda, "RBI may have to lower credit growth targets to 16% from 18%".

 


The Article about low growth in Loans (credit ) has already been posted byus here in this blog a few days back.,


Since the targetted level of credit, it seems, cant be achieved, therefore the view about reducing the targets by varous economic experts.


Increasing NPAs in Banks in India


Global rating agency Moody’s has expressed concerns on the outlook for India’s banking sector.


In its latest report, Moody’s has justified its negative outlook for the Indian banking sector on the grounds of challenging economic conditions and the rising level of problem loans which will have an adverse impact on their asset quality.


“Our main concern about the Indian banking system is the deteriorating asset quality and the volume of restructured loans,” it said. During fiscal year ending March 2009, absolute gross non-performing loans (NPLs) for all Indian commercial banks increased by 22.5% compared with 11.9% inthe previous year.

(sources Economic Times and BloomebergUTV dt 23-09-09)


Friends, we had posted an article about the Increasing trend of NPAs in the Indian Banking Industry , here in this Blog a few days ago. The Incerasing problem loans/ NPAs can cause what a havoc, USA and other countries are already witnessing,  where this problem was called "sub prime", and have to roll out BAIL-OUT Plans for their Banks/ Industries.


I Invite you all to express your views in this regard,


Wishing you the best of the times ahead.





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