The June quarter financial results of banks show how despite a push from the government for fresh loans to small businesses, they did default on existing obligations. Bankers said that small business owners who defaulted on business loans also saw their other loans getting classified as bad. For instance, India’s largest lender State Bank of India (SBI), where half of all home loans are to non-salaried borrowers, witnessed a deterioration in mortgage asset quality in the June quarter. To be sure, SBI is not the only bank witnessing stress in the small business segment. Bankers said that loans that slipped in the June quarter were not eligible for restructuring under the Reserve Bank of India’s (RBI’s) guidelines.

Source: Mint August 09, 2021 18:11 UTC