The asset quality of banks is likely to improve, as the latest biannual Financial Stability Report (FSR) of the Reserve Bank of India shows. The gross non-performing assets (GNPA) ratio of all scheduled commercial banks (SCBs) declined to 10.8% in September 2018 from 11.5% in March 2018. Going forward, it is likely to decline to 10.3% in March 2019 and 10.2% in September 2019.
The GNPA ratio of both public and private sector banks showed a half-yearly decline, for the first time since March 2015. The distribution of banks’ GNPA ratio shows that the number of banks having GNPA ratio less than 10% has gone down in September 2018 as compared to March 2018.
Sector-wise, the asset quality of industry improved in September 2018 as compared to March 2018 because of a reduction in fresh slippages, but that of agriculture and retail sectors deteriorated.
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Source: Financial Express