According to the RBI’s Financial Stability Report (FSR), if the economic environment worsens and severe pressure arises, the gross NPA ratio may go up to 14.8 per cent.
The Financial Stability Report (FSR) of the Reserve Bank of India (RBI) said that the gross non-performing assets (GNPAs) of banks, on a comparative basis, could rise to 13.5 per cent by September 2021 from 7.5 per cent in September 2020. Was According to the report, if the macroeconomic environment worsens and severe pressure arises, then the gross NPA ratio can go up to 14.8 per cent.
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According to the Financial Stability Report, an analysis of the pressure situation indicates that the gross NPAs of all scheduled commercial banks may increase from 7.5 per cent in September 2020 to 13.5 per cent by September 2021 on a comparative basis. The gross NPA ratio of public sector banks in the bank group was 9.7 per cent in September 2020, which may reach 16.2 per cent in September 2021.
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At the same time, the gross NPA ratio of private sector and foreign banks can increase from 4.6 percent and 2.5 percent to 7.9 percent and 5.4 percent respectively. The gross NPAs of public sector banks, private banks and foreign banks may increase to 17.6 per cent, 8.8 per cent and 6.5 per cent respectively by September 2021, if the macroeconomic environment and worsening or pressure increases. It states that this estimate of gross NPA ratio is a sign of a decrease in the value of the bank’s portfolio.
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Corona virus can cause property damage to banks
RBI Governor Shaktikanta Das has expressed a kind of apprehension about the financial health of banks due to the situation arising out of the corona virus, saying that the available data does not explain the real pressure of the books of these financial institutions. He also said that due to the epidemic, the assets of banks can be discounted and there may be a shortage of capital.
