are optimistic about tempo of credit offtake and some easing of risk of slippages in current fiscal on the back of the narrower GDP contraction in the second quarter.

Ashwani Bhatia, Managing Director (MD), State Bank of India (SBI) said things do not look bad so far. “With the (Q2 GDP) numbers, the double-digit dip in FY21 may not be there and we could see positive growth. This would have a beneficial effect on the credit side. However, much of the will be seen retail (auto, housing and personal loans) and SME segment,” he said.

Bank credit grew by 5.7 per cent year-on-year till early November 2020, shows Reserve Bank of India data.

“The risks of slippages are within control for now. Yet, we have to be watchful of some large exposures in airports and SME segment,” Bhatia added.

Sunil Mehta, chairman, Yes Bank, said the tempo of rise in credit off take will be maintained in the remainder of the current financial year. The confidence level is higher, giving a push to economic activity. This is expected to bring in cash flows and reduce the risk of slippages in credit portfolios.

A senior analyst with a credit rating agency said stress in the system due to economic disruption is very much there. But the pressure of slippage is much lower now than what was expected in the early days of pandemic.

Chandra Shekhar Ghosh, MD and CEO, Bandhan Bank said the various relief measures and policy reforms effected by the government appear to be bearing fruit. The country’s growth is being led by its agricultural and rural economy, which continued to show resilience in this quarter as well.

The services sector will be more vulnerable in the second half, particularly contract-based services. Despite this, the fiscal is going to be a story of two halves with better growth performance and higher government revenue in the second part, both of which can support spending, rating agency Crisil said.

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