Banks’ Gross NPAs May Rise To 9.5% In Severe Stress Scenario By September 2022:RBI Report
RBI has said that the gross NPAs of banks may increase in the worst case
Gross non-performing assets (GNPAs) of banks are expected to rise from 6.9 per cent in September 2021 to 8.1 per cent by September 2022, while they may rise to 9.5 per cent in severe stress scenarios.
This disclosure has come from the Financial Stability Report of the Reserve Bank of India (RBI).
However, the report also said that scheduled commercial banks would have sufficient capital both at the aggregate and individual level, even in times of stress.
It further said that emerging signs of stress in micro, small and medium enterprises (MSME) and micro finance segment also call for closer monitoring of these departments in future.
The RBI report said that the global economic recovery is losing momentum in the second half of 2021 mainly due to the re-emergence of the coronavirus infection and the new variant Omicron.
The RBI report further said supply disruptions and bottlenecks, elevated inflation levels and change in monetary policy stance and sluggish economic recovery in advanced economies as well as emerging market economies are factors.
On the domestic front, however, progress in vaccination has enabled the recovery to rebound after a debilitating second wave of the pandemic, despite recent signs of slowing down, adding that the corporate sector is gaining strength and Bank credit growth is improving. ,
The capital to risk-weighted asset ratio (CRAR) of scheduled commercial banks rose to a new peak of 16.6 per cent and their provision coverage ratio (PCR) stood at 68.1 per cent in September 2021.
