Banks may need to do an incremental provisioning of 20% for 50 large stressed accounts to absorb any losses, says a report. These 50 large accounts are from the sectors such as construction, power and metals, among others and constitute about half of the gross non—performing assets of the banking sector.
“Banks may require an incremental provisioning of 20% against cumulative debt of 50 large stressed assets worth over ₹4.3 lakh crore,” says a joint report by Assocham and rating agency Crisil.
While banks may have already provisioned for a part of these exposures, they need to adequately capitalise to absorb such losses which could fuel credit growth and support the next leg of economic growth, it said.