Is India's bad loans crisis going to be resolved anytime soon?
The much-discussed “bad bank” may finally materialise soon.
The entire project is expected to take on a quarter of the banking sector’s NPAs, which would be a share worth $27bn.
What exactly is a "bad bank"? And how might it help banks combat the NPA crisis?
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The costs will remain the same whereas revenues will be greatly stressed.
Of course, it will put stress on npa management as well.Businesses have been attacked from three fronts- the demand fallen, the supply chain got hampered and liquidity vanished.
Also, banks are giving limited credit risk in the pandemic situation.
Experts suspect a surge in npa in india.Large corporates will have a direct impact if they will not get demand from MSME as it is the essential element of the supply chain.
Hence, liquidity flow has to be there up to the MSME.What is the way out?MSME will have to rework the payment terms because their customers present less credit risk and can refinance the loans.
Large corporates will have to do reverse factoring arrangements.
Even the wealthiest countries struggled in supply chain management during the crisis.
India turned its humble workers across the crucial networks as supply warriors.