FICCI-IBA bank survey expects rise in NPAs for MSMEs over next 6 months

New Delhi, Aug 31 (KNN) The non-performing assets (NPAs) is expected to increase in the MSME sector in the next six months, said a survey by the Federation of Indian Chambers of Commerce & Industry (FICCI) and the Indian Banks’ Association (IBA).

This may happen due to the increase in the pressure on the asset quality of loans to MSMEs.

Responding to the survey bankers have identified aviation, power, tourism and hospitality, and retail trade along with a number of industries with high NPA risk.

In the MSME sector 65 per cent of the banks anticipate an increase in NPAs over the next six months.

Total 25 banks including public, private, and foreign institutions, took part in the survey and its fifteenth round was conducted from January to June, 2022.

Economic activity is still in the recovery phase as the spread of the Omicron variant of the coronavirus had dampened the start of the year.

Industries like infrastructure, chemicals, food processing, metals, iron and steel, and petroleum products demonstrate a rising demand for long-term credit, as per the survey.

The services sector is also expected to grow which was one of the most severely affected by the pandemic.  (KNN Bureau)