However, it said, India’s NPA The ratio is highest among comparable countries, despite a gradual decline.
It added that non-performing loans in advanced economies became easier due to continued deleveraging and institutional and government interventions.
As Indian economy navigates pandemic-induced shocks, it said, banks credit enhancement Scheduled commercial banks (SCBs) improved from August 2021 onwards to 13.1 per cent in early June 2022, from the last recorded in March 2019.
Besides retail, the key driver of this growth has been wholesale credit, which posted double-digit growth last year after a significant slowdown, it said.
After modest credit growth in recent years, it said, “moderate GDP growth due to economic expansion, increase in government and private capital expenditure, rise in commodity prices, More Scheme, extension of ECLGS to MSMEs and retail credit push.”
reserve Bank of India in your latest financial stability report Banks’ bad loans are expected to decline to 5.3 per cent of total advances by March 2023, from a six-year low on account of growth in credit and declining trend in stocks. NPA,
RBI further said that if the macroeconomic environment deteriorates into a moderate or severe stress scenario, the GNPA ratio may rise to 6.2 per cent and 8.3 per cent, respectively.
“Even at the bank group level, the GNPA ratio in the baseline scenario may come down by March 2023,” it said.
However, in the scenario of severe stress, the GNPA ratio of public sector banks (PSBs) may increase from 7.6 per cent in March 2022 to 10.5 per cent a year later. The GNPA ratio will increase from 3.7 per cent to 5.7 per cent for private sector banks and from 2.8 per cent to 4 per cent for foreign banks in the same period.