Five largest state-run banks in India (State Bank of India, Bank of Baroda, Punjab National bank, Bank of India and Canara Bank) have a minimum of ₹ 7.9 trillion of loans under the moratorium, along with loans that were stressed even before the pandemic of COVID-19 outbreak that hit cashflows and compensation capabilities. That accounts for about 20% of local advances.
Whereas the moratorium amount for SBI at ₹ 5.63 trillion is the accumulated loans the place repayments have been deferred.
In also additions, the information on the other four PSU banks is proscribed only to loans that have been already stressed and have now been given the moratorium.
These stressed loans are the place where repayments are overdue even by a day. Information for the other four banks doesn’t include loans that were regular with repayment so far but have voluntarily sought moratorium after the lockdown due to pandemic of corona-virus.
Ashutosh Mishra, head of research, institutional equity said that “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”.
Whereas ₹ 7.9 trillion is about 20% of the domestic mortgage e-book of these banks, the actual extent of the moratorium will be larger as a result of besides SBI, other banks haven’t given any absolute numbers on the moratorium.
Some have provided information on what parts of their mortgage e-book was below moratorium, while others have given the proportion of debtors who used the profit.
Rajnish Kumar, the chairman, SBI, introduced analysts on 5 June that out of the bank’s 94 lakh term loan accounts, 9 lakhs have not paid any installment, 700,000 have paid one installment and rest have paid two installments. While calculating moratorium numbers, Kumar said, if a debtor has paid two or more installments, it isn’t considered a deferment.
That apart, these 5 banks have also additionally provided the quantum of special mention account (SMA-2) debtors who have got the deferment and the benefit of standstill in asset classification.
SMA-2 loans are the place where repayments are overdue between 61 to 90 days. The total SMA-2 loans below moratorium for the top 5 public sector banks are ₹19,182 crores.
To be sure, in the absence of any standard disclosure format for moratorium loans, banks have used different metrics.
In also addition, even though the final total could be much higher, it does provide an early indication of the corona-virus impact on repayment capabilities.
Analysts said that whereas there must be an ordinary format of disclosure by banks, but lenders are maybe ready for the moratorium to finish for extra readability on the data.
Meanwhile, private-sector lenders reported their March quarter earnings before their state-owned friends gave an approximate quantity on their loans under moratorium.
As an instance, ICICI Bank mentioned about 30% of its mortgage e-book was below moratorium as of April finish. Axis Bank mentioned about 25-28% of its mortgage e-book was under moratorium as of 25 April.
Analysts also believe that the proportion of loan e-book under moratorium has been declining from the end-May levels.
Macquarie Research mentioned in a note on 17 June that it has checked with senior management of banks as well as in addition to Housing Development Finance Corporation Ltd. (HDFC).
The Macquarie note said “The unanimous feedback has been that there has been a decline in the total loan book under a moratorium from the 25% to 30% numbers reported as of end-May.”