Bank NPAs may go beyond 8% by September 2022, says RBI report

Going forward, as the economy recovers and credit demand rises, banks will need to ensure availability of sufficient capital to support credit growth

Bad loans of commercial banks in India may rise to between 8.1 and 9.5 per cent under varied degrees of stress by September 2022 from 6.9 per cent in September 2021.

Yet, banks are generally well placed to weather credit-related shocks with sufficient capital, both at the aggregate and individual levels. This is possible even under stress, according to the Financial Stability Report (FSR).  

FSR, the Reserve Bank of India’s (RBI’s) bi-annual report, said though banks are in better shape, urban cooperative banks (UCBs) and finance companies present a more varied picture. 

Going forward, as the economy recovers and credit demand rises, banks