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NPA crisis: Banks’ burden getting lighter?

FE Bureau

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.

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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.