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    Vikshita Vitthal Gujaran in News

    28-Apr-2023 08:24 AM


    India’s banks have it all, except caution

    India’s banks spent most of the last decade out in the wilderness, as a punishment for the lax underwriting standards on their corporate loans.
    That isn’t a problem yet, because gross nonperforming assets have declined at a faster pace of 27 billion rupees.
    With the incremental credit-to-deposit ratio running at 111%, Indian banks will have to pay more to savers — sacrificing some part of their high profitability.
    Although even this won’t affect all lenders equally.
    Higher deposit costs “will tip the scale in favor of our rated banks, allowing them larger bargaining power to price the loans and hence to defend their margins," according to Rebecca Tan, a senior analyst at Moody’s Investors Service.
    The aggregate bad-loan ratio of 4.41% at the end of last year was the lowest since March 2015.

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