Stressed loans totalling Rs 5.7 lakh crore may not be eligible for the proposed one-time debt recast aimed at saving borrowers affected by the coronavirus outbreak, three bankers said. These are so-called special mention accounts (SMAs) where repayments were already late by over 30 days on March 1, Reserve Bank of India’s (RBI’s) cut-off date to be eligible for the new scheme.
While the central bank has allowed a one-time debt recast for SMA-0 accounts—those with payments late up to 30 days—SMA-1 (31-60 days’ delay) and SMA-2 (61-90 days) are not covered.
Since 8.5% of all loans were non-performing at the end of March, total standard loans in India stood at ₹94.9 lakh crore. Of the total standard loans, 6.03%, or Rs 5.7 lakh crore, are loans with repayments delayed by 31-90 days and, hence, ineligible for recast under the new norms.
Recasting them wouldn’t be possible without classifying them as non-performing assets.
