Gross NPAs of banks decline to 12-yr low: RBI
The Reserve Bank on Monday said the asset quality of banks improved further, and their gross non-performing assets (GNPA) or bad loans ratio declined to a 12-year low of 2.6 per cent in September 2024 on the back of falling slippages and steady credit demand.
The RBI also flagged concern over a sharp rise in write-offs, especially among private sector banks (PVBs), which could be partly masking worsening asset quality in unsecured lending segment and dilution in underwriting standards.
The net NPA ratio or the proportion of net non-performing assets in net loans and advances was at around 0.6 per cent, according to the RBI’s December 2024 issue of the Financial Stability Report (FSR).
The Financial Stability Report reflects the collective assessment of the Sub-Committee of the Financial Stability and Development Council (FSDC) on the resilience of the Indian financial system and risks to financial stability.
“Buoyed by falling slippages, higher write-offs and steady credit demand, the gross nonperforming assets ratio of 37 scheduled commercial banks fell to a multi-year low of 2.6 per cent,” the report said.
Fresh accretion of NPAs in retail loan portfolios was also dominated by slippages in the unsecured loan book, with 51.9 per cent from unsecured loans as of September 2024.
