A Rs 2.4-Lakh-Crore Haircut Needed To Resolve Big Bad Loans
Indian banks may have to take a haircut worth Rs 2.4 lakh crore to settle 50 large stressed assets which form over half of the country’s total bad loans, according to Crisil Ratings. A haircut is the difference between the loan amount and the actual value of the asset used as collateral. It reflects the lender’s perception of the risk of fall in the value of assets.The 50 large accounts analysed by Crisil have a debt of Rs 4.3 lakh crore and banks will have to take a 60 percent cut to arrive at a sustainable level of debt, the ratings agency said in a report on Wednesday. Crisil estimates that banks have provisioned for around 40 percent of their exposure to these stressed assets.The concentration of bad debt in these 50 accounts remained c.....