Economy

RBI Financial Stability Report: Banks gross NPA may rise to 13.5% by September 2021

RBI logo. File   | Photo Credit: Reuters

Banks' gross non-performing assets may rise to 13.5% by September 2021, from 7.5% in September 2020 under the baseline scenario, according to Financial Stability Report (FSR) released by the Reserve Bank of India.

Also read: Policy roll-back may dent banks’ health, says RBI

If the macroeconomic environment worsens into a severe stress scenario, the GNPA ratio may escalate to 14.8%, the report said.

"The stress tests indicate that the GNPA ratio of all scheduled commercial banks (SCBs) may increase from 7.5% in September 2020 to 13.5% by September 2021 under the baseline scenario," the FSR report added.

Among the bank groups, public sector banks' (PSBs) GNPA ratio of 9.7% in September 2020 may rise to 16.2% by September 2021 under the baseline scenario, it noted.

The gross non-performing asset (GNPA) ratio of private sector banks (PVBs) and foreign banks (FBs) may increase from 4.6% and 2.5% to 7.9% and 5.4%, respectively, over the same period.

In the severe stress scenario, the GNPA ratios of PSBs, PVBs and FBs may rise to 17.6%, 8.8% and 6.5%, respectively, by September 2021, the report said.

"These GNPA projections are indicative of the possible economic impairment latent in banks' portfolios, with implications for capital planning," it added.

This article is closed for comments.
Please Email the Editor

Printable version | Mar 6, 2021 3:29:10 PM | https://www.thehindu.com/business/Economy/rbi-financial-stability-report-banks-gross-npa-may-rise-to-135-by-september-2021/article33550906.ece

Next Story