Dues past 90 days higher in MSME sector than in retail
The over 90 days past due (DPD) position of banks and non-banking financial companies (NBFCs) indicate much higher overdue levels in the micro, small and medium enterprise (MSME) sector than in the retail sector, even with the camouflage of regulatory reliefs, according to the Reserve Bank of India’s Financial Stability Report (FSR). Ninety DPD refers to payments that are late by more than 90 days. Such borrowal accounts get classified as sub-standard, necessitating provisioning by banks and NBFCs. The 90 DPD balances for MSME sector increased from 11.7 per cent in March 2020 to 12.5 per cent in June 2020. This, however, declined to 12 per cent in September 2020. The 90 DPD position for the retail sector has moved up from 3.2 per cent in March 2020 to 3.4 per cent in June 2020. It edged up further to 3.5 per cent in September 2020. “The 90 days past due position has remained stable (in the case of the consumer/ retail credit) but may not reflect the real vulnerability of the portfolio, in view of the regulatory reliefs granted following the pandemic,” the report said.
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