look news india
Mumbai: The gross non-performing asset (NPA) ratio of the country's scheduled commercial banks fell to a 12-year low of 2.80 per cent at the end of the last financial year i.e. 2023-24, while the net NPA ratio has come down to 0.60 per cent, said the 29th Financial Stability Report of the Reserve Bank of India (RBI).
Scheduled commercial banks have seen a sharp improvement in their health as a result of reduction in NPAs and increase in profits. The banks' return on assets and return on equity have been at a decade high of 1.30 per cent and 13.80 per cent, respectively.
On the other hand, the capital-to-risk weighted assets (CRAR) ratio of non-banking financial companies (NBFCs) stood at 26.60 per cent at the end of the previous fiscal year, while their gross NPA ratio was 4 per cent and return on assets ratio was 3.30 per cent, according to the Reserve Bank of India.
Despite challenges such as global geopolitical unrest, rising public debt and a slowdown in inflation, the global financial system remains resilient and financial conditions are seen to be stable.
The Reserve Bank has also said that India's economy and financial position are strong. With strong balance sheets, banks and financial institutions are supporting economic activities by providing loans.
The implementation of the Insolvency Bankruptcy Code (IBC) has not only helped reduce the NPA pressure on the country's banks but also accelerated the recovery of bad loans, an analyst said.
