Banks’ Gross NPAs May Fall to 9.3 Percent by March: Report

RBI in the past had asked public-sector banks to ensure that they keep a check on non-performing assets.

Reserve Bank of India in a Financial Stability Report has foreseen worsening situation of bad loans. This image is for representational purposes.(Photo: Reuters)

Foreseeing a worsening of the bad loan situation in the country, the Reserve Bank of India said in a Financial Stability Report released on Tuesday that the gross non- performing assets (NPA) of public sector banks can rise to as high as 9.3 percent in 2016-17 after hitting 7.6 percent in March 2016.

The report said macro stress tests suggested that under the baseline scenario, the GNPA ratio of banks may rise to 8.5 percent by March 2017 from 7.6 percent in March this year.

If macro scenarios deteriorate in the future, the GNPA ratio may further increase to 9.3 percent by March 2017 in a severe stress scenario.

Outgoing RBI Governor, Rajan had in the past asked public sector banks to push to ensure that PSUs classify unreliable stressed assets as non-performing assets and make provisions to ensure their long term health.

(With PTI Inputs)

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