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Bad Debts decline further, GNPAs expected at 3.6% by FY24: RBI

New Delhi: The Reserve Bank of India in its latest report mentioned that the bad debts in the Indian banking sector took a hit, marking a 10-year low. The report, called Financial Stability Report (FSR ) for June 2023 released Wednesday also stated that toxic assets are anticipated to decline by March 2024 in case […]

Edited By : Prateek Gautam | Updated: Jun 30, 2023 20:36 IST
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RBI expects GNPAs to decline further in the financial year 2024
RBI expects GNPAs to decline further in the financial year 2024

New Delhi: The Reserve Bank of India in its latest report mentioned that the bad debts in the Indian banking sector took a hit, marking a 10-year low. The report, called Financial Stability Report (FSR ) for June 2023 released Wednesday also stated that toxic assets are anticipated to decline by March 2024 in case of a baseline stress test.

In March 2023 Gross Non-Performing Assets (GNPA) of the scheduled commercial banks fell hitting a 10-year low of 3.9 per cent. It is further expected to fall to 3.6 per cent by March 2023, the Apex Bank stated.

Further, the report mentioned about 10 per cent of retail borrowers that haven’t paid their monthly payments. These borrowers balance quite well as they keep their accounts from slipping into NPAs with some or minimal payments before the 90-day deadline.

“Although the gross non-performing ratio of retail loans at the system level was low at 1.4 per cent as of March 2023, the share of ‘special mention accounts’ was relatively high at 7.4 per cent for scheduled commercial banks (SCBs) and it accounted for a tenth of their retail assets portfolio,” RBI’s latest report stated.

“As per the stress test results, the GNPA ratio of all SCBs may improve to 3.6 per cent by March 2024 under the baseline scenario,” said RBI.

Furthermore, the Central Bank’s yearly report said,” if the macroeconomic environment worsens to a medium or severe stress scenario, the GNPA ratio may rise to 4.1 per cent and 5.1 per cent, respectively.”

First published on: Jun 30, 2023 08:36 PM IST

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