90-Day Moratorium Not To Be Classified As NPAs: Das

Reserve Bank of India Governor Shaktikanta Das today said that the all accounts for which banks and financial institutions grant a moratorium, the 90-day NPA norm will exclude the moratorium period.

This would come as some relief to banks, who will most certainly report higher non performing assets in the next two quarters.

Pertinently, Banks would have to maintain additional provision of 10 percent on all such accounts over two quarters, the RBI Governor said.

The RBI governor noted that India was among handful of countries projected to cling on tenuously to economic growth. According to the RBI, India was expected to post sharp turnaround and resume pre-Covid trajectory with 7 percent growth in FY22.

Banks are likely to face a lot of non performing asset in the next two quarters. Private sector banks have grown their retail book a fair bit in 2019 and now this could lead to some amount of higher NPAs.

Meanwhile, the stock markets which had rallied significantly ahead of the RBI Governor's speech gave-up significant gains. The Nifty, which was up as much as 305 points before the governor began his speech, shed gains and was up only 172 points in trade. The index was last seen trading at 9,164 points.