Earnings For SBI, ICICI To Come Under Pressure If Farm Loan Waiver Is Implemented: Goldman Sachs

Let's stick with the financial space. There is a note coming out from Goldman Sachs on the farm loan waiver that we've seen in Telangana. The outlook on MFI is given the rising stress. Abhishek joins in with Goldman Sachs take on it, Abhishek. Well, Goldman Sachs has written on the banking sector. They say that rising concerns around the health of rural lending, especially the farm loan and the MFI in the financial system is a pain point. So one MFI player, which is obviously Uji one has lowered their FI 25 guidance and raise the credit cost estimate. Our stress building up in certain states, so NPS in states like Maharashtra is as high as 14 to 27% for PSU banks. So a farm loan waiver is implemented. Earnings will come under pressure for banks like SBI, ICS Bank, Kotak Mahindra Bank, for NBFCS like MMSL and LNT Finance as well As for companies that have MFI exposure like Bandhan Bank, IndusInd Bank, Credit Access Government as well as L&T Finance. So they maintain their preference with respect to SDFC Bank. Being the topic, Kotak Bank, Axis Bank and invest in bank amounts, private banks is what they favor to amongst NBFCS. They favor credit access grabbing LNT finance as well as Shiram finance. Now they say that Bureau data does suggest and management commentary also suggests there is a deteriorating asset quality environment and over leveraging across states. Now we had explained in Fin Street that you know, customers are leveraged as high as six to seven times from a single, you know, borrower or lender. So select states have where shares of borrowers having more than three lenders is higher than the national average of 14% includes the states like Tamil Nadu, Orissa, Bihar, Kerala, Karnataka, UP, Rajasthan. And Bureau data does suggest that you know there is stress rising in various pockets like those who have less than two lenders or three lenders or four lenders etcetera. Back to you. All right, Abhishek, thanks very much for that. So keep an eye out on this as well. Even as we look at what Bank Nifty can do on the upside, important to sort of stay cognizant with some of these risks at the margin.