Tag: credit concentration

FinMin flags concentration risk at 5 PSBs
Business

FinMin flags concentration risk at 5 PSBs

The finance ministry has cautioned five of the 12 public sector banks (PSBs) about the risk of credit concentration and asked them to ensure a well-diversified credit portfolio to reduce exposure to any particular group or industry.   During the 2022-23 (FY23) performance review of PSBs earlier this month, the ministry highlighted that the top 10 borrowers in the case of Bank of India, Canara Bank, Punjab National Bank, Punjab & Sind Bank, and UCO Bank constituted more than 10 per cent of their total outstanding credit as on March 31, 2023.   Doing a scenario analysis, the ministry examined the risk to capital adequacy ratio of the five PSBs that might occur in case the top three borrowers or the largest group borrower defaults.   ...