Even as Resolution 2.0 announced by the Reserve Bank of India is expected to help small borrowers tide over the current economic uncertainty, trends from the restructuring scheme last year indicate that retail customers were the ones to benefit most from it.
Data released by banks along with their fourth quarter results show that loans by retail borrowers dominated the loan restructuring scheme of last year, while only a few companies used the benefit.
Private sector lender HDFC Bank’s total restructuring was for 3.36 lakh accounts, amounting to ₹6,508.37 crore, of which 2.87 lakh accounts were for retail loans amounting to ₹5,456 crore.
Similarly, the total restructuring by Axis Bank amounted to ₹844.6 crore, of which retail loans accounted for ₹503.71 crore. Kotak Mahindra Bank restructured loans worth ₹121.5 crore, of which ₹82.38 crore were for retail borrowers.
ICICI Bank, YES Bank and IDBI Bank were among the outliers where the amount of corporate loans restructured was higher.
In the case of ICICI Bank, the total loan recast was for 1,624 accounts, of which 1,586 were retail accounts and just 30 were corporate accounts. However, in terms of exposure, retail loan restructuring amounted to ₹643.19 crore, while corporate loan recasts were higher at ₹1,323.28 crore.
For YES Bank, the number of accounts as well as exposure to corporate loans under the recast scheme were higher compared to retail accounts and loans.
Of the total loan recast of ₹1,112.21 crore by YES Bank, corporate loans accounted for 352 accounts valued at ₹940.11 crore.
However, the overall restructuring of loans was low for most private sector banks and they have already made sufficient provisions.
“We note that the bulk of slippages in 2020-21 has come from retail and MSMEs. Higher restructuring was also availed by both these segments. Among banks, large ones have seen sub-1 per cent restructuring of loans, while mid-size private banks and small finance banks have seen higher loan restructuring,” said Emkay Global Financial Services in a note.
More data will be available on the restructuring trends once public sector lenders also announce their fourth quarter results.