(You can now subscribe to our(You can now subscribe to our Economic Times WhatsApp channelIndian scheduled commercial banks' gross NPA ratio was down to a multi-year low of 2.8 per cent while the net NPA ratio fell to 0.6 per cent at end of March 2024, the Reserve Bank of India said in its 29th Financial Stability Report released Thursday.SCBs have been boosted by rising profitability and declining nonperforming assets, RBI said.
SCBs' return on assets (RoA) and return on equity (RoE) are close to decadal highs at 1.3 per cent and 13.8 per cent, RBI noted.The capital to risk-weighted assets ratio (CRAR) and the common equity tier 1 (CET1) ratio of SCBs stood at 16.8 per cent and 13.9 per cent, respectively, at end-March 2024, it said.According to the report, macro stress tests for credit risk reveal that SCBs would be able to comply with minimum capital requirements, with the system-level CRAR in March 2025 projected at 16.1 per cent, 14.4 per cent and 13.0 per cent, respectively, under baseline, medium and severe stress scenarios.These scenarios are stringent conservative assessments under hypothetical shocks and the results should not be interpreted as forecasts, it said.Non-banking financial companies' (NBFCs) CRAR stood at 26.6 per cent at end-March 2024 while their gross non-performing assets (GNPA) ratio at 4.0 per cent and return on assets (RoA) at 3.3 per cent, respectively, at end-March 2024.
"The global economy is facing heightened risks from prolonged geopolitical tensions, elevated public debt, and the slow progress in the last mile of disinflation.
Despite these challenges, the global financial system has remained resilient, and financial conditions stable," the report said.The central bank sees Indian economy and financial system to be in a robust and resilient condition.
"With improved balance sheets, banks and financial institutions are supporting economic activity through sustained credit expansion," RBI said.
(You can now subscribe to our
(You can now subscribe to our Economic Times WhatsApp channel
Indian scheduled commercial banks' gross NPA ratio was down to a multi-year low of 2.8 per cent while the net NPA ratio fell to 0.6 per cent at end of March 2024, the Reserve Bank of India said in its 29th Financial Stability Report released Thursday.SCBs have been boosted by rising profitability and declining nonperforming assets, RBI said. SCBs' return on assets (RoA) and return on equity (RoE) are close to decadal highs at 1.3 per cent and 13.8 per cent, RBI noted.The capital to risk-weighted assets ratio (CRAR) and the common equity tier 1 (CET1) ratio of SCBs stood at 16.8 per cent and 13.9 per cent, respectively, at end-March 2024, it said.According to the report, macro stress tests for credit risk reveal that SCBs would be able to comply with minimum capital requirements, with the system-level CRAR in March 2025 projected at 16.1 per cent, 14.4 per cent and 13.0 per cent, respectively, under baseline, medium and severe stress scenarios.These scenarios are stringent conservative assessments under hypothetical shocks and the results should not be interpreted as forecasts, it said.Non-banking financial companies' (NBFCs) CRAR stood at 26.6 per cent at end-March 2024 while their gross non-performing assets (GNPA) ratio at 4.0 per cent and return on assets (RoA) at 3.3 per cent, respectively, at end-March 2024."The global economy is facing heightened risks from prolonged geopolitical tensions, elevated public debt, and the slow progress in the last mile of disinflation. Despite these challenges, the global financial system has remained resilient, and financial conditions stable," the report said.The central bank sees Indian economy and financial system to be in a robust and resilient condition. "With improved balance sheets, banks and financial institutions are supporting economic activity through sustained credit expansion," RBI said.
