If the macroeconomic setting worsens right into a extreme stress situation, the GNPA ratio might escalate to 14.8%, the report mentioned
Banks’ gross non-performing property might rise to 13.5% by September 2021, from 7.5% in September 2020 beneath the baseline situation, in accordance with Financial Stability Report (FSR) launched by the Reserve Bank of India.
If the macroeconomic setting worsens right into a extreme stress situation, the GNPA ratio might escalate to 14.8%, the report mentioned.
“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 financial institution teams, public sector banks’ (PSBs) GNPA ratio of 9.7% in September 2020 might rise to 16.2% by September 2021 beneath the baseline situation, it famous.
The gross non-performing asset (GNPA) ratio of personal sector banks (PVBs) and overseas banks (FBs) might improve from 4.6% and a couple of.5% to 7.9% and 5.4%, respectively, over the identical interval.
In the extreme stress situation, the GNPA ratios of PSBs, PVBs and FBs might rise to 17.6%, 8.8% and 6.5%, respectively, by September 2021, the report mentioned.
“These GNPA projections are indicative of the possible economic impairment latent in banks’ portfolios, with implications for capital planning,” it added.