State-Run Banks Asked To Monitor Top Loan Accounts: Report

India has requested state-run lenders to undertake stricter monitoring of prime company mortgage accounts and submit a plan to take care of enterprise dangers in key areas inside two weeks, three banking sources stated on Monday.

Indian banks, up to now, have needed to take deep haircuts on their publicity to debt-laden corporations admitted beneath chapter laws.

“Bankers have been instructed that it will be prudent to extend stress-testing of huge company mortgage accounts,” a banker at a state-run bank said.

Banks were also asked to monitor the mark-to-market impact on their trading books amid rising interest rates and maintain their liquidity ratios, the sources added.

None of the sources wanted to be named because they are not allowed to speak to media.

Finance ministry officials met state-run bank chiefs on Saturday, with lenders asked to identify stress points, including “concentration risks and adverse exposures,” based on a authorities assertion.

The Finance Ministry didn’t reply to a Reuters electronic mail in search of extra particulars from the assembly.

Lenders have been additionally requested to extend the frequency of assessing their asset-liability profiles amid the worldwide banking turbulence, one other banker stated.

The collapse of some U.S. regional banks have led to issues about lenders globally having to area attainable losses on their held-to-maturity portfolios.

Reuters had earlier reported that the federal government had sought particulars of the bond portfolios of those banks as a precautionary train.

India’s banking system continues to be steady and resilient, and lenders have constructed ample buffers to defend themselves from any unexpected stress, the Governor of the Reserve Bank of India stated earlier in March.

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