‘Bank NPAs may rise due to UP farm loan waiver’

Kotak Institutional Equities said it was not able to take any conclusive decisions on the outcomes of such loan waivers as performance across states has not been uniform.

By: ENS Economic Bureau | Mumbai | Published: March 15, 2017 3:29 am

Some lenders could see a rise in bad loans owing to loan waiver schemes likely to be announced across states, Kotak Institutional Equities said in a report on Tuesday, adding that it was not able to take any conclusive decisions on the outcomes of such loan waivers as performance across states has not been uniform.

It said that Uttar Pradesh and Punjab are critical states given that the banks have around 10% of loans in those states, mostly in the agriculture sector with high share of overdues between three and 10 per cent across banks.
Public sector banks, have higher exposures in this segment as compared to private banks.

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