The gross non-performing asset (GNPA) ratio of Indian banks fell to a 12 year low of 2.8% in March 2024 and is expected to reduce further down to 2.5% by the end of the financial year 2024-25, according to the RBI’s Financial Stability Report released on Thursday.
What is the gross non-performing asset ratio for banks?
This ratio refers to the proportion of the total value of bad loans, which are bank loans that are unlikely to be repaid (also known as gross non-performing assets), to the total assets the bank has or the total loans it has given.
Also Read: World Bank forecasts India’s remittances to grow at only half the rate in 2024 compared to 2023
A lower GNPA ratio means the number of loans that may go unpaid are less and can be a positive indicator.
In September, the ratio was 3.2%, highlighting a significant improvement now.
What is the net non-performing asset ratio for banks?
The net non-performing asset (NNPA) ratio also declined to 0.6% this March, compared to 0.8% last September.
Also Read: Government may establish mediation council this year to improve ease of doing business: Report
The net non-performing asset (NNPA) ratio is the proportion of bad loans which the bank has actually created a provision for, compared to the total assets of the bank.
What type of bank loans are these?
Total loans given by banks increased during the second half of the financial year 2023-24 in public sector banks and foreign banks, while it moderated for private banks.
Loans to the services sector the services sector as well as personal loans saw the most increase among all banks.
Personal loans accounted for more than half of private banks’ credit growth, which was led by housing loans, followed by other personal loans.
Also Read: Yes Bank lays off 500 employees to cut costs, company to restructure internally
Thank you for your sharing. I am worried that I lack creative ideas. It is your article that makes me full of hope. Thank you. But, I have a question, can you help me?