RBI discusses asset quality with bank heads

Credit rating agency Fitch Ratings said in a report that it expects the banks to show a gradual improvement in the stressed assets ratio

Top officials of Reserve Bank of India (RBI) held a meeting of select bankers in public and private sector here on Monday to deliberate asset quality and on improving the banks' balance sheets.

In a statement, the RBI said the meeting was chaired by Governor Raghuram Rajan. The two deputy governors R Gandhi and S S Mundra and other senior officials of the central bank were also present at the meeting.

The statement is silent on the names of the banks or their heads who attended the meeting.

During the meeting, RBI and the bankers discussed various issues including the asset quality of banks and the way forward on improving the quality of bank balance sheets.

Credit rating agency Fitch Ratings in a report said it expects the banks to show a gradual improvement in the stressed assets ratio, and that it may take some time for the bank's non-performing assets (NPA) to witness a turnaround.

The credit rating agency said loan-loss provision cover has deteriorated steadily since financial year 2011-12, due mainly to state-owned banks where the growth of stressed assets has sharply outpaced provisioning for this end.