RBI Governor stresses on continuity of credit flows

Reserve Bank of India (RBI) Governor Shaktikanta Das asked chief executives of banks to ensure business continuity and credit flows in order to support the nascent economic recovery amidst the concerns of a second wave of COVID infections. He stressed on the need to raise capital to support balance sheets and cushion businesses against losses.
Bad loans in the banking sector are expected to soar by Rs 1.3 lakh crore in the near term, as the Supreme Court discontinued the stay on recognition and classification of non-performing assets (NPA). Without this stay, the gross NPA of banks would have reached Rs 8.7 lakh crore, or 8.3% of advances, by the end of December 2020, as opposed to the actual reported Gross NPA of Rs 7.4 lakh crore.Das also stressed on the need for banks to closely monitor payments and other IT systems and make them more resilient and efficient to offer seamless and uninterrupted customer service.