Mumbai, July 17 (UNI) Constraints in demand and high interest rates will double the non performing assets of Banks in the retail segment, according to rating agency Crisil, a Standards&Poor's company.
The increasing pressure on cost of fund has become a greater challenge for the banks in the present scenario that might propel their NPAs to 4.1 per cent as against the projected 2.4 per cent, CRISIL CEO and Managing Director Roopa Kudva told reporters on the sidelines of a function here today.
Though money supply is good, the cost of money had increased and on the other side demand is also an issue, she said.
Demand in realty sector has been suppressed in most the cities due to high prices and higher interest rates. Further, under these circumstances, pressure is likely to increase, Ms Kudva said.
''However, most of the large banks have been well capitalised to sustain but medium and small players would be in trouble,'' she asserted.
Responding to a query on growth and inflation, Ms Kudva said, an average 7-8 per cent growth for the current fiscal is forecasted and average inflation is being supposed to be around 8.5 to 9 per cent.
''Corporate profitability is under pressure due to rising input cost, but we hope better results ahead as the food prices are likely to come down,'' she said.
The greatest fear of high oil prices has started weathering down, as it has come down sharply by over USD 10 per barrel within two days, which is a good sign for the future inflation expectations, she added.
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