New Delhi: Banks’ non-performing loans are likely to rise sharply as a result of the Karona epidemic. So banks are now on high alert to meet future funding needs. The country’s four largest state-owned banks are considering selling their shares. These are State Bank, Punjab National Bank, Union Bank of India and Bank of Baroda. Banks are considering selling shares through eligible institutional placements (QIPs). They will make the final decision after the release of the second quarter financial results of the current financial year. State Bank plans to raise Rs 20,000 crore from the capital market, Punjab National Bank Rs 6,000 crore, Bank of Off Baroda Rs 4,000 crore and Union Bank Rs 7,400 crore.
A six-month moratorium was announced to relieve pressure on customers during the lockdown. So at that time there was no clear picture of the debt repayment and the risk of drowning. The moratorium expires on the 31st of this month. So by next October, there will be a clear picture of non-performing loans or NPAs. The banks will then be responsible for selling the shares to the Merchant Banks. The Punjab National Bank plans to raise funds from the capital market in the last quarter of the current financial year. A few days back, private sector banks ICICI Bank, Axis Bank and Kotak Mahindra Bank raised funds from the capital market through QIP.
