As bad loan recognition process nears completion, gross non-performing loans of banks improved to 9.1% as of end-September 2019, compared to 11.2% in FY18, says a Reserve Bank of India (RBI) report.
Net non-performing assets (NPAs) of all commercial banks reduced to 3.7% in FY19 as against 6% in FY18.
“The gross NPA ratio of all banks declined in FY19 after rising for seven consecutive years, as recognition of bad loans neared completion,” the RBI said in its report on Trend and Progress of Banking 2018-19.
It said the improvement in asset quality was driven by State-run lenders that experienced a drop both in the gross NPA (GNPA) and net NPA ratios.
Decline in the slippage ratio as well as a reduction in outstanding gross NPAs helped in improving the GNPA ratio, the report said.