INDIA

Talking to reporters on the sidelines of the Ficci-IBA summit here, the deputy governor said, “We don’t see any systemic risks from the current trend of rising non-performing assets. But, there could be some sectoral risks going forward.”He was responding to a question in the wake of the rising interest regime as the central bank has jacked up its key lending rate by a whopping 425 basis points in the past 15 months to batten down inflation and the result measures by banks to pass on the cost to consumers.He further said, “I would not say we are particularly worried about retail loan segment, but yes, the retail segment is the one that is likely to feel the pressure.” Banks have been witnessing rising risks from small and medium scale industries as well as in their unsecured portfolios, which primarily consist of personal loans and credit cards business apart from the home loans front.At the post-policy interaction with the media, RBI Governor D Subbarao had also said that the bankers had told him that there was no systemic risks as of now for banks, as the interest rate gets tightened. On Tuesday, the chief financial officer of the nation’s largest lender Diwakar Gupta had said that his bank’s Rs 7,000 crore education loan has been witnessing pressure and the level of the stressed assets have reached 4 per cent of this exposure. The Kolkata-based United Bank chairman and managing director Bhaskar Sen, too, said that there are rising risks to his assets, especially from the SMEs and the retail sector and that he may look at increasing in the tenor of the loan than increasing the EMIs. [More]
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