Tag: Covid wave

Defying Covid wave, disbursal of Mudra loans grows in Q1

Banking & Finance

[ad_1]

Read More/Less


Notwithstanding the severe second wave of Covid-19, disbursal of petty business loans under Pradhan Mantri Mudra Yojana (PMMY) has picked up in the first quarter of the current financial year compared to the same period last year.

As on July 2, loans worth ₹37,601 crore have been disbursed against a total sanctioned amount of ₹41,516 crore, according to data available with Mudra.

“The disbursals in the first quarter of FY22 were higher by about ₹4,000 crore compared to the first quarter of FY,’’ a senior official of Mudra told BusinessLine.

“Though the second wave of the pandemic in the first quarter was more severe than last year, the lockdowns were scattered in different States and there was no national lockdown. Even bank employees braved Covid and continued to work. All this drove growth in disbursal of Mudra loans,’’ a senior official of State Bank of India told BusinessLine.

Three categories

Mudra loans are extended in three categories – Shishu (up to ₹50,000), Kishor (above ₹50,000 and up to ₹5 lakh) and Tarun (above ₹5 lakh and up to ₹10 lakh).

Among the three categories, Shishu loans have a lion’s share in the total loans at about 48 per cent.

Bankers expect the growth in PMMY loans to gain pace further in the remaining quarters with the second wave of covid coming under control now.

Last financial year was challenging for the small business loans. The loans dropped to ₹2,79,481 crore from ₹3,37,495 crore in the financial year 2019-20.

However, there is no complete data on the state of non-performing assets (NPAs) in the segment and among banks.

Mudra loans are given by commercial banks, regional rural banks, small finance banks, MFI and NBFCs. The public sector banks, however, have been the main channel and account for over 60 per cent of the loans disbursed.

[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , ,

RBI, BFSI News, ET BFSI

Banking & Finance

[ad_1]

Read More/Less


Mumbai, As the severe Covid crisis and the resultant lockdowns have shut down economic activities to a great extent, the monthly RBI Bulletin has said that demand and employment have been among the most impacted economic aspects amid the second Covid wave.

The RBI Bulletin for May 2021 noted that the real economy indicators moderated through April-May 2021.

“The biggest toll of the second wave is in terms of a demand shock – loss of mobility, discretionary spending and employment, besides inventory accumulation, while the aggregate supply is less impacted,” it said.

It, however, said that the resurgence of Covid-19 has dented, but not debilitated economic activity in the first half of Q1 2021-22. Although extremely tentative at this stage, the central tendency of available diagnosis is that the loss of momentum is not as severe as at this time a year ago, it added.

On the NBFC segment, the report said that the consolidated balance sheet of NBFCs grew at a slower pace in Q2 and Q3 2020-21. However, NBFCs were able to continue credit intermediation, albeit at a lower rate, reflecting the resilience of the sector.

The Reserve Bank and the government undertook various liquidity augmenting measures to tackle Covid-19 disruptions, which facilitated favourable market conditions as indicated by the pick-up in debenture issuances.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , ,

Covid-led delays for infra projects a worry for banks, BFSI News, ET BFSI

Banking & Finance

[ad_1]

Read More/Less


It’s not just retail loans that banks may have to worry about.

The big infrastructure projects, which are already undergoing slow progress, may face more stress as the new Covid wave intensifies restrictions.

The government has unveiled an infrastructure push in the Union budget, which may be hit due to the renewed vigour of the pandemic.

Developers hit

Developers are facing issues of transporting labour and construction material to sites due to the new restrictions. With oxygen supply to steel and cement industries diverted to medical use dropping there may be bottlenecks in input supplies. Also, the government has indicated it may borrow more from the market, which would raise funding costs for the projects.

If the Covid wave continues for long, the infrastructure projects will face a setback and lead to their re-rating.

Cost overruns

Already projects are lagging even before the new Covid wave hit

As many as 448 infrastructure projects, each worth Rs 150 crore or more, have been hit by cost overruns totalling

more than Rs 4.02 lakh crore, according to a report. The Ministry of Statistics and Programme Implementation monitors infrastructure projects worth Rs 150 crore and above.

Of the 1,739 such projects, 448 reported cost overruns and 539 were delayed. “Total original cost of implementation of the 1,739 projects was Rs 22,18,210.29 crore and their anticipated completion cost is likely to be Rs 26,20,618.44 crore, which reflects overall cost overruns of Rs 4,02,408.15 crore (18.14 per cent of original cost),” the ministry’s latest report for January 2021 said.

The expenditure incurred on these projects till January 2021 is Rs 12,29,517.04 crore, which is 46.92 per cent of the anticipated cost of the projects.

Project delays

However, the report said the number of delayed projects decreased to 401 if delay is calculated on the basis of the latest schedule of completion.

Further, for 941 projects neither the year of commissioning nor the tentative gestation period has been reported.

Out of 539 delayed projects, 106 projects have overall delays in the range of 1-12 months, 131 projects have delays of 13-24 months, 187 projects reflect delays in the range of 25-60 months and 115 projects show delays of 61 months and above. The average time overrun in these 539 delayed projects is 44.65 months. Reasons for time overruns as reported by various project implementing agencies include delay in land acquisition, delay in obtaining forest and environment clearances, and lack of infrastructure support and linkages.

Delay in tie-up for project financing, delay in finalisation of detailed engineering, change in scope, delay in tendering, ordering and equipment supply, and law and order problems, among others, are the other reasons, the report said.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , ,