NPA-hit banks get a new worry: El Nino
MONSOON BLUES Sub-normal rains may hit farm insurance; banks’ bad loans likely to rise due to high agriculture credit target
From page 15 NEW DELHI: The Indian banking sector, already reeling under the impact of the rising level of non-performing assets (NPAs) — loans that do not yield returns — is now staring at a new problem ahead: El-Nino.
With El Nino likely to hit India’s economic growth and inflation and the Indian Meteorological Department predicting belownormal monsoon this year, the new government will be pushed to look into their effects not only on the agriculture sector but the banking sector as well.
The El Niño phenomenon, which tends to occur every three-six years, is associated with above-average water temperatures in the central and eastern Pacific and can, in its worst form, bring drought-like conditions to a number of countries in the world. It had last hit India’s monsoon in 2009, leading to the worst drought in almost four decades.
According to finance ministry sources, agriculture insurance could be a critical area that the new finance minister and his team will have to look into. Besides, the new government would have to ensure that the level of NPAs does not rise any further due to enhanced target for agriculture credit.
“We need to take into account the impact of weather and climate change in a more holistic manner and policies this year must be rolled out in a manner that the impact is minimal on the economy… the new government will have the immediate challenge of taking that into account,” a senior government official said.
NAME- RAJ GAURAV
PGDM 2SEM
MONSOON BLUES Sub-normal rains may hit farm insurance; banks’ bad loans likely to rise due to high agriculture credit target
From page 15 NEW DELHI: The Indian banking sector, already reeling under the impact of the rising level of non-performing assets (NPAs) — loans that do not yield returns — is now staring at a new problem ahead: El-Nino.
With El Nino likely to hit India’s economic growth and inflation and the Indian Meteorological Department predicting belownormal monsoon this year, the new government will be pushed to look into their effects not only on the agriculture sector but the banking sector as well. The El Niño phenomenon, which tends to occur every three-six years, is associated with above-average water temperatures in the central and eastern Pacific and can, in its worst form, bring drought-like conditions to a number of countries in the world. It had last hit India’s monsoon in 2009, leading to the worst drought in almost four decades.
According to finance ministry sources, agriculture insurance could be a critical area that the new finance minister and his team will have to look into. Besides, the new government would have to ensure that the level of NPAs does not rise any further due to enhanced target for agriculture credit.
NAME- RAJ GAURAV
PGDM 2SEM
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