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Bank GNPAs dip to a low of 2.3% in March: RBI report
Mumbai: The gross non-performing assets (NPAs) of the banking system declined to a multi-decadal low of 2.3 per cent in March 2025, the Reserve Bank...
Mumbai: The gross non-performing assets (NPAs) of the banking system declined to a multi-decadal low of 2.3 per cent in March 2025, the Reserve Bank of India (RBI) said in a report on Monday.The level of GNPAs had stood at 2.6 per cent in September 2024. The apex bank cautioned downside risks to India’s growth in near term.
In the half-yearly The Reserve Financial Stability Report, the RBI said the GNPAs for 46 banks may rise to 2.6 per cent by March 2027.It can be noted that dud assets have been one of the most challenging parts for the banking system most of the latter part of the previous decade, but the system has been improving on the key ratios over the last few years.
“Nonetheless, external spillovers and weather-related events could pose downside risks to growth. The outlook for inflation, on the other hand, is benign and there is greater confidence in the durable alignment of inflation with the Reserve Bank’s target,” said Sanjay Malhotra, Governor, RBI.
“Financial markets remain volatile, especially core government bond markets, driven by shifting policy and geopolitical environment. Alongside, existing vulnerabilities such as soaring public debt levels and elevated asset valuations have the potential to amplify fresh shocks,” it read.
However, the domestic financial system is exhibiting resilience fortified by healthy balance sheets of banks and non-banks, said the Central Bank.
“Financial stability, like price stability, is a necessary condition, and not a sufficient one to boost India’s potential growth. As custodians of financial stability, we must endeavour to develop a well-functioning financial system that not only promotes macroeconomic stability but also provides financial services efficiently,” said Malhotra.
Financial conditions have eased supported by accommodative monetary policy and low volatility in financial markets. The strength of the corporate balance sheets also lends support to overall macroeconomic stability.
“The soundness and resilience of scheduled commercial banks (SCBs) are bolstered by robust capital buffers, multi-decadal low non-performing loans ratio and strong earnings,” the RBI report mentioned.
