Indian banks may have to write off 60 percent of the value of bad loans from their 50 large stressed asset accounts, or a hit of 2.4 trillion rupees ($37.31 billion), ratings agency CRISIL said on Wednesday.
The 50 stressed companies, which account for 4 trillion rupees in soured loans, are largely from the metals, construction and power industries and account for nearly half of the total non-performing assets in the banking sector as of the end of March, CRISIL said.
The credit agency, part of S&P Global, estimated that banks have provisioned for only around 40 percent of their exposure to these assets.
Banks had total non-performing loans of about 7.29 trillion rupees, or 5 percent of India’s gross domestic product, as of end-March.
The report comes after rival India Ratings and Research had estimated banks taking 12 of the country’s largest defaulters to bankruptcy court would need to make additional provisioning of at least 180 billion rupees.
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