Farm loan waivers pose a threat to asset quality

HDFC Bank, IndusInd Bank and RBL Bank's Q1 show suggests more pain ahead from agri loans

Hamsini Karthik  |  Mumbai 

When India’s top-rated bank known for its enviable asset quality reports higher non-performing assets (NPA) and from its agriculture loans portfolio at that, certainly not all is fine in the banking system. Paresh Sukthankar, deputy managing director, HDFC Bank, said that about 60 per cent of the NPAs recognised in Q1 or the June 2017 quarter were agricultural loans because the repayment discipline of some customers deteriorated due to farm loan waivers announced by state governments.   The pain could last for another quarter because recovery depends on customer ...

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