India's Financial System Resilient, NPAs at Multi-Year Low: RBI
By Rediff Money Desk, Mumbai Jun 27, 2024 16:06
India's financial system remains robust with gross NPAs of banks falling to a multi-year low of 2.8% in March 2024, according to the RBI's Financial Stability Report.
Mumbai, Jun 27 (PTI) Indian economy and the financial system remain robust and resilient as the gross non-performing assets (GNPA) ratio fell to a multi-year low of 2.8 per cent at the end-March 2024, RBI said in its June Financial Stability Report (FSR).
Scheduled Commercial Banks' gross non-performing assets (GNPA) ratio fell to a multi-year low of 2.8 per cent and the net non-performing assets (NNPA) ratio to 0.6 per cent at end-March 2024, it said.
"The Indian economy and the financial system remain robust and resilient, anchored by macroeconomic and financial stability. With improved balance sheets, banks and financial institutions are supporting economic activity through sustained credit expansion," it said.
The capital to risk-weighted assets ratio (CRAR) and the common equity tier 1 (CET1) ratio of SCBs stood at 16.8 per cent and 13.9 per cent, respectively, at end-March 2024, it said.
According to the report, macro stress tests for credit risk reveal that SCBs would be able to comply with minimum capital requirements, with the system-level CRAR in March 2025 projected at 16.1 per cent, 14.4 per cent and 13.0 per cent, respectively, under baseline, medium and severe stress scenarios.
These scenarios are stringent conservative assessments under hypothetical shocks and the results should not be interpreted as forecasts, it said.
With regard to non-banking financial companies (NBFCs), the report said, they remain healthy, with CRAR at 26.6 per cent, GNPA ratio at 4.0 per cent and return on assets (RoA) at 3.3 per cent, respectively, at end-March 2024.
Referring to the global economy, the report said, it is facing heightened risks from prolonged geopolitical tensions, elevated public debt, and the slow progress in the last mile of disinflation.
Despite these challenges, the global financial system has remained resilient, and financial conditions stable, it noted.
Scheduled Commercial Banks' gross non-performing assets (GNPA) ratio fell to a multi-year low of 2.8 per cent and the net non-performing assets (NNPA) ratio to 0.6 per cent at end-March 2024, it said.
"The Indian economy and the financial system remain robust and resilient, anchored by macroeconomic and financial stability. With improved balance sheets, banks and financial institutions are supporting economic activity through sustained credit expansion," it said.
The capital to risk-weighted assets ratio (CRAR) and the common equity tier 1 (CET1) ratio of SCBs stood at 16.8 per cent and 13.9 per cent, respectively, at end-March 2024, it said.
According to the report, macro stress tests for credit risk reveal that SCBs would be able to comply with minimum capital requirements, with the system-level CRAR in March 2025 projected at 16.1 per cent, 14.4 per cent and 13.0 per cent, respectively, under baseline, medium and severe stress scenarios.
These scenarios are stringent conservative assessments under hypothetical shocks and the results should not be interpreted as forecasts, it said.
With regard to non-banking financial companies (NBFCs), the report said, they remain healthy, with CRAR at 26.6 per cent, GNPA ratio at 4.0 per cent and return on assets (RoA) at 3.3 per cent, respectively, at end-March 2024.
Referring to the global economy, the report said, it is facing heightened risks from prolonged geopolitical tensions, elevated public debt, and the slow progress in the last mile of disinflation.
Despite these challenges, the global financial system has remained resilient, and financial conditions stable, it noted.
Source: PTI
DISCLAIMER - This article is from a syndicated feed. The original source is responsible for accuracy, views & content ownership. Views expressed may not reflect those of rediff.com India Limited.
You May Like To Read
TODAY'S MOST TRADED COMPANIES
- Company Name
- Price
- Volume
- Srestha Finvest
- 0.85 ( -4.49)
- 60128195
- Vodafone Idea L
- 9.10 ( -0.87)
- 30647821
- Standard Capital
- 1.51 (+ 19.84)
- 30506923
- SRU Steels
- 8.11 ( -9.08)
- 27907590
- Rajnish Wellness
- 2.91 ( -8.20)
- 27783162
MORE NEWS
India-Canada Trade Unfazed by Diplomatic Row |...
Despite diplomatic tensions, India-Canada bilateral trade in goods remains stable....
Transformers & Rectifiers India Promoter Sells...
A promoter of Transformers & Rectifiers (India) has sold a 1.8% stake in the company...
Sebi Urges Investors to Deal with Registered...
Sebi warns investors to only deal with registered persons and entities. Find...