When safer banks lend less : Dr. Sankarshan Basu

Banks are being asked to look ahead and recognize losses before they occur. The shift to the Expected Credit Loss (ECL) framework is meant to make lending more resilient. But anticipating risk has its own consequences, says Dr. Sankarshan Basu, Finance & Accounting area, IIMB.

In the op-ed, ‘New Credit Loss Norm Could Hurt’ for The Hindu Businessline, co-authors Prof. Basu, Prof. Soumik Bhusan, TAPMI Bengaluru, and PhD scholar Satya Jeet of IIM Ranchi, opine that when risk must be accounted for upfront, some borrowers simply become harder to serve.