GNPAs are expected to improve further to 3.6 per cent in the baseline scenario, says RBI in its Financial Stability Report
The gross non-performing assets ratio for Indian banks has continued its downward trend and declined to a 10-year low of 3.9 per cent as of March 2023, the Reserve Bank of India (RBI) said in its bi-annual Financial Stability Report (FSR) released on Wednesday.
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In the report, the RBI said the GNPAs are expected to improve further to 3.6 per cent in the baseline scenario.
In his foreword to the report, RBI Governor Shaktikanta Das said the banking and corporate sector balance sheets have been strengthened, engendering a ‘twin balance sheet advantage’ for growth.
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He stressed the need for international cooperation and regulatory focus to tackle challenges like cyber risk and climate change. “Financial stability is non-negotiable, and all stakeholders in the financial system must work to preserve this at all times,” Das said.
Amid events like some of the banks facing severe stress or even going down globally, Das underlined the need to be watchful, and added that the financial sector regulators and regulated entities in India are committed to stability.
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“The global economy is facing heightened uncertainty amidst banking system fragility in certain countries, persisting geopolitical tensions and moderating but elevated inflation. Despite global headwinds, the Indian economy and the domestic financial system remain resilient, supported by strong macroeconomic fundamentals,” the RBI said in the report.
