Covid-19 crisis: Slippages may jump to Rs 5.5 trillion

The incremental stress is mainly from sectors including power, infrastructure, constructions, hospitality, iron and steel, telecom, and realty.

Stress emerging from the severe economic shock caused by steps to contain the pandemic may drive total slippages to Rs 5.5 trillion in FY21.

The corporate side may see slippages of Rs 3.4 trillion, and non-corporate side – retail, farming and MSMEs – may account for Rs 2.1 trillion, according to India Ratings.

Banks faced elevated provision pressure (amount set aside for stressed loans) resulting from the corporate stress cycle, from FY16-FY20. For this, they had made substantial provisions and were moving towards a moderated credit cost cycle.

However, the COVID-related measures are likely to result in another cycle of stress.

Additionally, the pressure on non-corporate segments, which were already visible before the outbreak, is likely to intensify, said the rating agency.

With a significant drop in economic activity, most sectors in India are expected to experience varying degrees of revenue contraction in FY21, on account of demand and supply disruption.

This presents a fresh challenge to banks, which, over the last four years, have been reeling from corporate stress.

Referring to an analysis of 30,000 firms, the rating firm said the total stressed corporate pool may increase from 3.8 per cent of the total bank credit in December 2019, to 6.6 per cent in the post-COVID phase.

The incremental stress is mainly from sectors including power, infrastructure, constructions, hospitality, iron and steel, telecom, and realty.

Referring to non-corporates, it said stress and slippages would aggravate in retail, agriculture, as well as in the micro, small and medium enterprises (MSME) segments.

About 40 per cent of incremental slippages could come from non-corporates.

Steps announced by the government as part of the economic package are mid-to-long-term ones.

If these are implemented timely, they could aid materially to reduce the expected stress in MSMEs.

The outbreak will significantly aggravate stress in the retail portfolio, specifically the unsecured one.

Delinquencies in this segment have increased by 50 per cent.

The impact could be higher, especially for private sector banks, whose unsecured retail portfolio accounts for 16.6 per cent of the total bank credit against 6.3 per cent for public sector banks (PSBs).

Credit costs – the amount set aside for stressed loan pool – could thus increase up to Rs 2.7 trillion in FY21 for the system. Around 70 per cent of which could be attributed to PSBs.

If the accelerated provisioning regime is reinstated, there could be additional credit costs of 0.3-0.6 per cent.

This could require the government to infuse more capital into PSBs.

Capital requirement under the benign provision regime for PSBs would range from Rs 30,000-55,000 crore.

This factors in the volatile markets for additional tier-1 bonds, and hence the limited traction for them.

If the accelerated provisioning regime is reinstated, the capital requirement could further increase up to Rs 40,000 crore to maintain Tier-1 capital of 10 per cent.

This is 50 bps higher than the regulatory requirement that comes into action after September 2020, the rating agency added.

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Chris Cuomo Hits Trump’s Coronavirus Claims With A Blunt Reality Check

President Donald Trump on Monday said the nation has “met the moment and we have prevailed” when it comes to coronavirus testing.

Banners at the White House even declared that “America leads the world in testing,” but CNN’s Chris Cuomo wasn’t buying it.

“Why are governors today begging the president for money to test and trace?” he asked. “The only thing that we have the most of in this world is deaths when it comes to COVID.” 

Indeed, the United States has the highest death toll from the infection, passing 80,000 on Monday. And when it comes to testing, America is well below a number of nations on a per capita basis, including Denmark, Italy, New Zealand, Germany and Canada. 

Cuomo warned Trump that this was “no time to pretend” as none of the states reopening had the capacity to test and trace those who may be ill to stop new outbreaks. And he called out the president for his shifting rhetoric on testing. 

See more of his monologue below:

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US Records Nearly 2000 Covid-19 Deaths In Past 24 Hours

After a lull in coronavirus-related death toll in the United States since the beginning of this month, the country recorded nearly 2,000 deaths in the past 24 hours.

Daily death toll has been moving around 1000 since May 1, but it rose to the 2000 range for the third day in a row. On Wednesday, 1,949 people died of the killer disease in the U.S.

The new surge in casualties brought the total number of deaths to more than 73,000.

A total of 1,228,609 cases and 73,431 Covid-19 related deaths were recorded in the U.S., as per latest data compiled by the Center for Systems Science and Engineering at Johns Hopkins University. This makes up nearly one third of the global cases, and more than one-fourth of people died of the pandemic worldwide.

The worldwide Covid-19 death toll is now above 264,000.

Of all the infections reported in the U.S., 323,978 are in New York, the epicenter of the deadly virus in the country. The number of casualties reached 25,623 in the state, as of John Hopkins’ 10:00 a.m. ET update on Thursday.

New Jersey (8549 deaths and 131890 infections), Michigan (4256 deaths, 45179 infections), Massachusetts (4420 deaths and 72025 infections), Louisiana (2167 deaths, 30399 infections), Illinois (2974 death, 68232 infections), Pennsylvania (3345 deaths, 54800 infections), California (2464 deaths, 60616 infections) Connecticut (2718 deaths, 30995 infections), Florida (1539 deaths, 38002).

Meanwhile, reflecting the bleak picture of unemployment in the country, the latest data released by the Department of Labor Thursday shows that more than 33 million Americans have filed for jobless claims since the coronavirus pandemic hit the nation.

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Nancy Pelosi Reveals Why It’s Not Worth Phoning Trump During Coronavirus Pandemic

House Speaker Nancy Pelosi (D-Calif.) said she doesn’t plan on picking up the telephone to call President Donald Trump about the coronavirus pandemic anytime soon.

Pelosi on Tuesday told MSNBC’s Nicolle Wallace that her time is better spent talking about the public health crisis that’s killed almost 60,000 people nationwide “in a public forum” because “that’s something he pays attention to.”

Wallace asked Pelosi if she thought it was “worth being the one who picks up the phone” to call Trump to talk about ways to move forward amid the pandemic. The relationship between the pair has been increasingly strained ever since the Democratic-controlled House’s impeachment of the president over the Ukraine scandal. Trump was later acquitted by the GOP-controlled Senate.

“Well, let me say ‘worth.’ What is the word ‘worth’? Would it change his behavior?” Pelosi responded.

“Has he ever said anything in our meetings that we’ve had about Dreamers, that he was going to get the job done and then he changed his mind, what he said about infrastructure and then he changed his mind, what he said about guns and then he changed his mind?” Pelosi said.

She added that “time is the most finite quantity that we all have.”

Check out the clip here:

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U.S. To Deport 129 Haitians, Despite Coronavirus Risk

The Trump administration is scheduled to deport 129 Haitian migrants on Thursday, despite the fact that many of them have likely been exposed to the coronavirus in detention centers in the United States.

In the weeks leading up to the deportation flight, U.S. Immigration and Customs Enforcement detained at least 13 of those likely to be deported at Louisiana’s Pine Prairie ICE Processing Center, where at least two detainees have tested positive for COVID-19, the disease caused by the coronavirus. Several of the likely deportees shared a bunk at Pine Prairie with one of these coronavirus-infected detainees, and some are now feeling unwell.

One of the bunkmates, Fredly Charles, is now showing symptoms himself. He has “lost his sense of smell, and has a fever, fatigue and is sweating,” his attorney, Ira Alkalay, told HuffPost. Charles was told he might be deported this week, and he’s been given no indication that his symptoms have changed the plan, Alkalay said, who explained that migrants deported by ICE often don’t receive confirmation until the last minute about when exactly they will be deported.

Children may also be present on Thursday’s deportation flight, according to Nicole Phillips of Haitian Bridge Alliance, who told HuffPost that she has received information that 49 minors will be on the flight.

ICE did not respond to a request for comment on the planned removals.

President Donald Trump has responded to the coronavirus pandemic by clamping down even further on immigration, including shutting down the border to asylum-seekers and barring certain legal immigrants. His administration has also continued to carry out deportations, even though experts have warned that it increases the risk of spreading the virus, both among the people being deported and those they interact with in their native countries. The removal flight to Haiti is a prime example ― in its effort to expel immigrants from the U.S., the nation is endangering public health elsewhere.

“The U.S. shouldn’t be doing this,” a Haitian civil servant who works with deportees told HuffPost. By taking people from different detention centers and putting them together on a plane, particularly without testing them, “you put everybody at risk, including little children,” said the official, who spoke on the condition of anonymity because he fears for his job if he speaks out publicly.

Haiti is already struggling to respond to a growing number of coronavirus cases, including three Haitian deportees from the U.S. who tested positive for the virus after taking tests administered by the Haitian Ministry of Public Health. Those deportees were on the same flight from the United States to Haiti as several children, including a 3-year-old girl, according to the Haitian civil servant. 

Further U.S. deportations could worsen the COVID-19 outbreak in Haiti, given that U.S. immigration authorities do not systematically test migrant detainees for the virus prior to deporting them. Public health experts warned that this outbreak could be particularly deadly due to the weaknesses of Haiti’s health and sanitation infrastructure and many Haitians’ lack of access to basic necessities.

A Haitian official who is involved in the country’s pandemic response said it would be dangerous to have more deportations “at a time when the domestic rate is rising and may increase exponentially.”

Since April 7, when ICE deported 61 Haitians, including the three who tested positive for COVID-19, the number of confirmed coronavirus cases in Haiti has climbed from 24 to 47, according to data from the Haitian Ministry of Public Health, which also reported that the disease has caused three deaths so far.

However, given that relatively little testing has been done in the country, the number of COVID-19 cases and deaths could, in reality, be much higher than these official statistics suggest, said the official working on Haiti’s pandemic response, who wished to remain anonymous because he fears reprisal.

 “We’re potentially sitting on a ticking time bomb,” he told HuffPost. 

The official confirmed that the three COVID-positive Haitians deported by the U.S. this month have been placed in isolation in a local hospital. Given that Haiti has very limited hospital resources, as well as a limited capacity to carry out COVID-19 testing, he warned that “this is putting an additional burden on all of our fragile systems.” 

Alkalay, the attorney, said his client has repeatedly asked the authorities at Pine Prairie to test him for the coronavirus. 

“He has been asking for a test quite insistently for days, and he has not been given a test,” he said, adding that some of the other detainees who believe they have been exposed to the virus have also tried unsuccessfully to get tested.

“There’s a strong likelihood that a lot of these people have been exposed to the coronavirus and would test positive,” said Phillips of Haiti Bridge Alliance, who, like Alkalay, has begun to suspect that this may be exactly why the U.S. government is not testing deportees for the virus.

 “I think they don’t want to know,” she said. 

  • Stay up to date with our live blog as we cover the COVID-19 pandemic
  • What happens if we end social distancing too soon?
  • What you need to know about face masks right now
  • How long are asymptomatic carriers contagious?
  • Lost your job due to coronavirus? Here’s what you need to know.
  • Everything you need to know about coronavirus and grief
  • Parenting during the coronavirus crisis?
  • The HuffPost guide to working from home
  • What coronavirus questions are on your mind right now? We want to help you find answers.
  • Everyone deserves accurate information about COVID-19. Support journalism without a paywall — and keep it free for everyone — by becoming a HuffPost member today.
     

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