RBI sees bad loans topping 10% by March 2018, warns of more NPA pain
The Reserve Bank today warned that asset quality of banks continued to remain weak with gross non-performing loans rising to 9.6 % in the year to March 2017 and may rise to 10.2% by next March.
Gross non-performing assets stood at 9.2% in the September 2016.
The net non-performing advances (NNPA) ratio marginally increased to 5.5 per cent in March 2017 from 5.4% in September 2016, the RBI said in its Financial Stability Report (FSR) released here.
The stressed advances ratio declined from 12.3%to 12% due to fall in restructured standard advances, the report added.
“While there is a fall in stressed advances ratio in agriculture, services and retail sectors, the stressed advances ratio in industry sector, however, rose from 22.3% to 23%, mainly on account of sub-sectors such as cement, vehicle, mining & quarrying and basic metals,” the report said.
According to a macro-stress test for credit risks, banks gross NPAs may rise to 10.2 per cent.
“The stress test indicated that under the baseline scenario, the average GNPA ratio of all commercial banks may increase from 9.6 per cent in March 2017 to 10.2 per cent by March 2018,” the report said.
In FY17, accretion of new NPAs from restructured standard advances declined.
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