Asset quality set to worsen, but banks resilient enough: RBI report

The GNPA ratio of PSBs, which was 8.8 per cent in September this year, may deteriorate to 10.5 per cent by September 2022 under the baseline scenario

Indian banks’ asset quality may deteriorate but lenders have enough capital to withstand a severe shock, said the bi-annual Financial Stability Report, prepared taking inputs from all the financial regulators and released by the Reserve Bank of India (RBI), on Wednesday.

A similar sentiment was expressed by the RBI’s trend and progress report released on Tuesday. It had said the asset quality of banks and non-banking financial companies (NBFCs) will witness pressure as regulatory forbearance and standstill on asset classification come to an end in a few months.

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