Bad loans declining to 12-year low: RBI report

Mumbai, June 27

The decline in bad assets of banks to a 12-year low of 2.8 per cent and strong GDP numbers will help in sustaining the growth momentum and withstanding global shocks, said the Reserve Bank’s Financial Stability Report (FSR) released on Thursday.

The real gross domestic product (GDP) rose by 8.2 per cent in 2023-24 against 7 per cent in the preceding fiscal, despite muted private and government consumption and external demand conditions acting as a drag.

The FSR report showed that the gross non-performing assets (GNPA) ratio of scheduled commercial banks (SCBs) fell to 2.8 per cent and the net non-performing assets (NNPA) ratio to 0.6 per cent at the end of March 2024. The GNPA ratio of all SCBs may improve to 2.5 per cent by March 2025, the report noted.

The FSR said there are several positives for the near-term economic outlook, including robust domestic demand conditions, high business optimism, the government’s sustained focus on capital expenditure (which should crowd in more private investment through multiplier effects), firms utilising high profits to augment investible resources, and real estate activity gathering pace.

Another big positive is that credit growth is deepening, supported by healthier bank balance sheets, it said. — PTI

Financial stability matrix at its best: Das

RBI Governor Shaktikanta Das on Thursday asked financial system stakeholders to assign “highest priority” to governance. “Today, the matrix of financial stability is perhaps at its best, but the real challenge is to maintain it and improve upon it further,” Das noted.