Banks sitting on big losses; hopefully it's just a one-time loss: Hemindra Hazari

In a chat with ET Now, market analyst Hemindra Hazari, shares his views on the banking sector. Excerpts:

ET Now: What is your view on what happens to banks? They have been lenders to some of the capex-heavy companies and that may go off. Banks are starting to show a bit of a chink in the armor. What do you think?

Hemindra Hazari: This chink in the armor should have been seen many months ago - the market is probably recognising it very late. The fact is that banks are sitting on very large losses because of these infrastructure projects they have lent to. A lot of these projects are going nowhere and lot of these have been done at highly inflated costs.

Banks need to take a haircut and when they do, that will be instrumental in removing a lot of the management in these companies. You will probably have a more professional management and then you can lend further to these companies.

Thus, banks are going to be sitting on big losses. We just hope that it will be a one-time loss.