Rs 3.5 lakh cr stressed loans untagged: Report

These accounts are part of the total stressed corporate exposure (interest coverage ratio of 1.5x) of 19.3 percent or Rs 13.5-14 lakh crore as of September 2018.

“Around 3.9 percent of the stressed corporate exposure of 19.3 per cent total stressed corporate accounts are still unrecognised and are standard in banks’ books, while around Rs 1.5-2 lakh crore of them may slip into NPAs by H2 of FY20,” Jindal Haria, associate director for banking and financial institutions at India Ratings told reporters Tuesday.

Of the Rs 13.5-14 lakh crore stressed corporate loans, banks have recognised only Rs 10 lakh crore as of September 2018, he added. Jindal said banks may need an additional f Rs 40,000 crore in provisions for these Rs 1.5-2 lakh crore loans, which may slip into NPAs.

Meanwhile, the agency has maintained a stable outlook on large private sector banks and just two of the 19--State Bank of India and Bank of Baroda-and has retained a negative outlook for the remaining state-run banks till FY20.

In FY20, all banks on which we have a stable outlook might see moderate write-backs of provisions on corporate assets, depending on the pace of resolutions, it said. The top 40 assets under the NCLT resolution regime are worth Rs 4.50 lakh crore for which banks have made provisions for 70-75 percent, the agency said in a report.