COVID-19 increases the bad loans ratio of Indian banks
Coronavirus pandemic was something totally unprecedented for all the countries across the Globe. Every country suffered massive economic setbacks during this period and is still trying to cope up with the situation. In such a case, in countries like India where the economy was already struggling COVID-19 emerged as even more consequential.
According to RBI data, loans to companies and people have been expanding at a modest 5.5 percent -6 percent in recent months, half the rate experienced before the outbreak. State Bank of India, the country’s largest lender, intends to nearly increase its lending growth rate to 10% in the fiscal year that began April 1 but is willing to fall short of that target.
According to a news report by Scroll in March 2020, the Centre for Monitoring Indian Economy estimates that roughly 50 lakh jobs will have been lost. According to a June 17 projection, 2.53 crore jobs have been lost since January 2021. As of June 6, the 30-day moving average unemployment rate was 13 percent, up from 5.5 percent in June 2018. From 42.9 percent in June 2018, the labor participation rate has dropped to 39.7% in June 2021.
