The infusion of Rs 34561 crore into the banking system by the Reserve Bank of India by way of successful dollar- rupee swap to the tune of $5 billion may not only ease liquidity situation of the NPA- hit banks but has also raised hopes of reviving bank lending to sectors like real estate which are under restrictive lending .
This RBI operation assumes significance in the backdrop of improvement in the gross non- performing asset ratio of banks, first time in a decade . The NPA ratio has come down to 10.3 percent by the end of 2018-19 under the base- line scenario , compared to 11.2 percent a year before. The Insolvency & Bankruptcy Code (IBC) has also contributed significantly in tackling the bad loan menace. In fact, industry veterans like Deepak Parekh, in view of the current scenario, has made a case for banks getting back to lending.
Says Pradeep Aggarwal, Chairman of National Council on Affordable Housing, Assocham and Founder & Chairman of Signature Global, ” In the wake of growing liquidity in the banking system and reducing NPAs, the banks should revive lending to real estate sector. Especially when bank lending plays a crucial role for the success of Prime Minister Modi’s flagship programme, ‘ Housing for All’. And to achieve that bank funding to price- sensitive affordable housing segment ( a major contributor to Housing for All) should be pushed so that capital infusion at reasonable rates may help push up housing supply “.