Mumbai: The gross non-performance assets of the banking system are set to a decrease of at least 7.1 percent in March 2022, compared with 7.6 percent on FY21-END, said the domestic rating agency on Wednesday.
The NPA will drop lower on a higher recovery and increase, as well as faster credit growth, said ICRA, adding that fresh increase to NPA will be higher at FY22 because there is no regulatory dispensation such as the moratorium.
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GNPAS and NNPA (NET NPA) are expected to decrease to 6.9-7.1 percent and each 1.9 to 2.0 percent as of March 31, 2022,” he said.
Reserve Bank Financial Stability Report said GNPA in March 2021 has come at 7.6 percent and estimates it to increase to 9.8 percent in FY22-END under its basic case assumptions.
The Governor of RBI Shaktikanta Das said the balance of balance sheets and the performance of financial institutions in India was far more than previously projected, but a clearer picture will emerge as a result of regulatory reliefs fully working through.
The rating agency said the NPA generation had just dropped to Rs 2.6 Lakh Crore or 2.7 percent progress in FY21 compared to Rs 3.7 lakh crore or 4.2 percent on FY20 and added that the same thing would be higher at FY22.
The title of asset assets the number of banks does not reflect the fundamental pressure on income and cash affected by the borrower affected because Covid-19 and various steps of regulations and policies such as the loan payment moratorium, jammed on the classification of assets and liquidity for borrowers under the emergency credit line guarantee scheme ( ECLGS) has a positive impact on the quality of the reported asset lender.
“With the absence of standstill on the classification of assets, we expect a higher generation of fresh NPAs, we also expect recovery and improvement to increase FY22,” he said, adding that the ongoing fiscal first half could see higher.
Addition because of the second wave of pandemic.
Credit provisions for banks are moderated to 2.5 percent of the progress of FY21 compared to 3.7 percent on FY20, even as core operating profits increase with the steps of limiting costs.
“In this sector, its extraordinary turnover for public sector banks, which reported earnings after five consecutive years and with NNPA at the lowest level seen over the past six years (3.1 percent as of March 31, 2021), ICRA expects the public bank sector (PSB) To remain profitable, “Vice President to rank the financial sector Anil Gupta said.
After the maintenance of capital, the upgraded capital position coupled with a lower NNPA means a better solvency profile and the prospect of increasing the ability to support better growth and profitability in the future, he added.
“We believe that banks are relatively better placed to handle stress from the second wave and therefore we continue to maintain stable prospects in this sector,” said Gupta.
Gnpas Bank to Increase FY22: Report
