Stock markets in India are presently trading marginally higher. Sectoral indices are trading on a positive note with stocks in the IT sector and metal sector witnessing maximum buying interest. Consumer durables stocks are trading in the red.
The BSE Sensex is trading up 139 points (up 0.4%) and the NSE Nifty is trading up 37 points (up 0.4%). The BSE Mid Cap index is trading up by 0.1%, while the BSE Small Cap index is trading up by 0.2%. The rupee is trading at 64.34 to the US dollar.
In the news from the banking space, according to data compiled by credit rating agency ICRA, Indian state-owned banks have written off loans worth Rs 553 billion in the first six months of FY18.
As per the data, PSU banks wrote off Rs 255 bn in the June quarter and Rs 297 bn in the quarter to September, the highest in any quarter.
This comes as banks attempt to clean up their balance sheets after a string of defaults by firms and promoters amidst an economic slowdown.
Also, the write-off comes at a time when banks are struggling to resolve many cases of repayment of loans and recover money stuck with corporate defaulters through insolvency proceedings.
The consensus among bankers is that, given the current trend, the total write-off in FY18 is estimated to top Rs 1 trillion.
Note that the government, in October, announced the recapitalization plan to inject Rs 2.11 trillion into public sector banks over a period of two years. This move was mainly aimed at resolving the long-standing non-performing assets (NPA) problem of PSBs. It is expected to shore up the capital of state-run banks, spurring them to clean up the bad loan mess and revive lending.
The implementation of this initiative will, however, take some time. As a recent edition of The 5 Minute WrapUpstates…
