Scheduled Commercial Banks witness drop in Bank Gross NPA Ratio in 2019: RBI Report


Scheduled Commercial Banks (SCBs) have shown improvement in terms of Bank Gross Non-Performing Assets (NPAs) Ratio in 2019, says a report by the Reserve Bank of India.


The Report on Trend and Progress of Banking in India 2018-19 released by the RBI is a statutory publication in compliance with Section 36 (2) of the Banking Regulation Act, 1949.

This Report reveals the performance of the banking sector, such as the co-operative banks, and non-banking financial institutions during 2018-19 and 2019-20 so far.

The latest version of the report reveals an improvement in the banking sector in terms of the gross non-performing assets (GNPA) ratio of Scheduled Commercial Banks (SCBs). It showed a decline from 11.2 per cent in March 2018 to 9.1 percent in March 2019 and a return to profitability in H1: 2019-20. This turnaround has been supported well by a conducive policy environment justified by the traction in insolvency and bankruptcy code (IBC).

Recapitalisation of Public Sector Banks (PSBs) held the capital position of PSBs. In the co-operative banking sector, the consolidated balance sheet of Urban Co-operative Banks (UCBs) extended in 2018-19 on account of strong deposit growth, although, a fall in interest income unfavorably affected their profitability; among rural co-operatives, the financial health of state co-operative banks and district central co-operative banks hindered with an increase in the non-performing assets and slowdown in profitability.

The speed of credit growth by NBFCs, which began dropping in 2018-19, sustained in the first half of 2019-20, largely hit by the performance of non-deposit taking systemically significant NBFCs (NBFCs-ND-SI), via capital buffers remained on top of the predetermined norms. Bank credit remained a steady source of funding for NBFCs.

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