Banks debt affected the most by COVID-19 BANK NEWS

 

 

New Delhi: The COVID-19 outbreak hit every single business and sector into the stress which is making it worst. The recent report by the Reserve Bank of India, the expert headed by Shri K V Kamath, states that this pandemic has affected eh maximum best companies and business, and currently banking sector is in more risk because of the loan restructuring process.  

 

The most affected trades are Retail and Wholesale trade with an outstanding debt of Rs 5.4 lakh crore. Currently, nineteen sectors were not under stress before but after the pandemic, it hit hard in the business. 

 

The pandemic has also affected 11 sectors including Non-banking financial companies (NBFCs), Agriculture, and allied products. 

 

Shri Kamath has classified the specific ratios on five major parameters including total outstanding liability to adjusted net worth, total debt to earnings before interest, tax, depreciation, and amortization (EBITDA), current ratio (current assets divided by current liabilities), debt service coverage ratio and average debt service coverage ratio to decide whether or not companies will be eligible for loan restructuring. A Nomura analysis of 5,179 companies across 25 sectors shows that 30-50% of them do not meet the necessary criteria for backward-looking data.  

 



Posted Date :  16-09-20

Categories : BANK NEWS

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