India’s five largest state-run banks collectively have at least ₹7.9 trillion of loans under moratorium, including loans that were stressed even before the coronavirus outbreak, regulatory filings showed. That accounts for about 20% of local advances.
The five lenders are State Bank of India (SBI), Bank of Baroda (BoB), Punjab National Bank (PNB), Bank of India and Canara Bank.
While the moratorium amount for SBI at ₹5.63 trillion is the aggregate loans where repayments have been deferred, the other four PSU banks refer only to loans that were already stressed and have now been given the moratorium. These stressed loans are the ones where repayments are overdue even by a day. Data for the other four banks does not include loans that were regular with repayment so far, but have voluntarily sought moratorium after the lockdown.
To be sure, in the absence of any standard disclosure format for moratorium loans, banks have used varying metrics. Also, even though the final tally could be much higher, it does provide an early indication of covid-19’s impact on repayment capabilities.
Analysts said there should be a standard disclosure format, but lenders are perhaps waiting for the moratorium to end for more clarity on the data.
“I think by September, banks will have a clearer picture of what the final moratorium numbers are, as the process is ongoing at the moment. Different banks are using different methods to calculate the moratorium amount and there is a lack of coherence at the moment,” said Asutosh Mishra, head of research, institutional equity, Ashika Stock Broking.
While ₹7.9 trillion is about 20% of the domestic loan book of these banks, the actual extent of the moratorium will be greater because except SBI, other banks have given data only on the stressed loans that have gone into moratorium, but not the total amount under moratorium.
Some have provided data on what percentage of their loanbook was under moratorium, while others have given the percentage of borrowers who used the benefit.
Rajnish Kumar, chairman, SBI, told analysts on 5 June that out of the bank’s 9.4 million term loan accounts, 900,000—or nearly a tenth—have not paid any instalment, 700,000 have paid one instalment and rest have paid two instalments. While calculating moratorium numbers, Kumar said, if a borrower has paid two or more instalments, it is not considered a deferment.
That apart, these five banks have also provided the quantum of special mention account (SMA-2) borrowers who have got the deferment and the benefit of standstill in asset classification. SMA-2 loans are those where repayments are overdue between 61 to 90 days—loans close to turning bad.
The total SMA-2 loans under moratorium for top five public sector banks are ₹19,182 crore.
Meanwhile, private sector lenders, which reported their March quarter earnings before their state-owned peers, gave an approximate number on their loans under moratorium.
For instance, ICICI Bank said about 30% of its loan book was under moratorium as of April end. Axis Bank said about 25-28% of its loan book was under moratorium as on 25 April.
Analysts also believe that the percentage of loan book under moratorium has been declining from the end-May levels.
Macquarie Research said in a note on 17 June that it has checked with senior management of banks as well as Housing Development Finance Corp. Ltd (HDFC).
“The unanimous feedback has been that there has been a decline in the total loan book under moratorium from the 25–30% numbers reported as of end-May,” the Macquarie note said.
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