Non Performing assets down by 8% |
Higher recoveries from existing stressed assets under the Insolvency and Bankruptcy Code, reduced occurrences of Non-Performing Assets and a pick-up in credit growth should be able to help shrink banks` gross NPAs by 350 basis points to 8% by March 2020. Public sector banks, which account for over 80% of the NPAs in the system, alone could see gross NPAs climb down over 400 bps to approximately 10.6% by March 2020, from a peak of 14.6% in March 2018. In the fiscal 2019, write-offs, coupled with recoveries under IBC in key large stressed assets, played a critical role in reduction of NPAs. Gross NPAs within the banking system hit a peak of 11.5% in March 2018 and stood at 9.3% in March 2019. Banks have already recognised approximately 245.2 billion dollars in stressed loans as NPAs since financial year 2016, aided by the Reserve Bank of India`s (RBI) strict norms and asset quality reviews. Meanwhile, accretion of fresh NPAs dropped to 3.7% in FY 2019 against 7.4% in FY18 and is expected to be lower at around 3.2% this fiscal year.
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