Capitalisation worries for banks to get bigger: Financial stability report

The low valuations of state-run banks also make it difficult for them to tap the market

The Financial Stability Report of December 2020 has made it crystal clear that capitalisation woes of banks may have just begun, especially for state-run banks.
 
State-run banks are seen being the worst affected among bank groups, with their gross-non-performing asset (GNPA) ratio expected to increase to 16.2 per cent by September 2021 under the baseline scenario, from 9.7 per cent in September 2020, and to a high of 17.6 per cent in a severe stress scenario. State-run banks are worse off, when compared to a systemic baseline and severe stress GNPA ratios of 13.5 per cent by September 2021