Credit rating agency Crisil has estimated that banks may be constrained to take a 60 percent haircut on the 50 top non-performing assets, based on their embedded value. Haircut refers to a lender settling for less as repayment from the borrower than the original amount.
Krishnan Sitaraman, Senior Director, said, "That would mean banks will have to increase provisioning by another (about) 25 percent this fiscal, compared with 9 percent in the last." But the impact could be mitigated if banks are allowed to amortize the provisioning across six-eight quarters, he added.
Crisil: PSBs may have to take 60% haircut
By IndianMandarins - 2017-06-27 11:45:21
Credit rating agency Crisil has estimated that banks may be constrained to take a 60 percent haircut on the 50 top non-performing assets, based on their embedded value. Haircut refers to a lender settling for less as repayment from the borrower than the original amount.
Krishnan Sitaraman, Senior Director, said, "That would mean banks will have to increase provisioning by another (about) 25 percent this fiscal, compared with 9 percent in the last." But the impact could be mitigated if banks are allowed to amortize the provisioning across six-eight quarters, he added.
