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Gross NPAs of banks may fall to 8% by March: CRISIL

Since 2016, loans worth Rs 17 lakh crore have been identified as NPAs (nonperforming assets) with 80 per cent of these loans held by public sector banks.

, ET Bureau|
Updated: Jun 26, 2019, 07.50 AM IST
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It said public sector banks (PSBs), which account for over 80 per cent of the NPAs in the system, should see their gross NPAs climb down over 400 bps to close to 10.6 per cent by March 2020 from a peak of 14.6 per cent in March 2018.
Banks’ asset quality is set to see a marked improvement by the end of the current fiscal on expected recoveries from stressed accounts in NCLT and reduction in fresh additions to slippages. According to a report by credit rating agency CRISIL, gross NPAs in the banking system are set to fall by 350 bps to 8 per cent by March 2020 from 11.5 per cent in March 2018.

Since 2016, loans worth Rs 17 lakh crore have been identified as NPAs (nonperforming assets) with 80 per cent of these loans held by public sector banks. Aided by policy action by RBI, such as PCA and stringent NPA identification norms, asset quality saw improvement in 2019.

CRISIL estimates the trend to continue based on the assumption that the resolution process of stressed assets would contiue at a faster pace.

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