When the market started and I was listening CNBC TV Suddenly around 11 am Udayan Mukherjee of CNBC TV jumped of his seat and shocked to find the GDP numbers of India. Within few minutes India was into a roller coaster ride. July-Sept GDP up 7.9%. Economist and all market speculators are having their eyes coming out of shock. Before I get into further analysis just a quick look into the break up of India GDP figures.
At present, the provisioning requirements for NPAs range between 10 per cent and 100 per cent of the outstanding amount, depending on the age of the NPAs and the security available. Banks can also make additional specific provisions subject to a consistent policy based on riskiness of their credit portfolios, because the rates of provisioning stipulated for NPAs are the regulatory minimum. It has been observed that there is a wide heterogeneity and variance in the level of provisioning coverage ratio across different banks.
Zero interest rates of US and low interest rates of other countries made cheap money to flow like water coming out of a fountain. All these cheap money founded BRIC economies assets at cheap valuations giving them enough scope to generate healthy ROI.
