Banking sector: More of a crisis than opportunity

There are some positive signals, as NPAs are growing at slower rates and interest costs have fallen

The NPA situation is likely to get worse. The Reserve Bank of India's (RBI’s) Financial Stability Report projects gross non-performing assets (NPAs) could rise to over 10 per cent, or even 11 per cent of all advances in a worst case scenario by March 2018. In March 2017, about 9.6 per cent of gross NPAs were logged. Credit offtake declined to historic lows in March 2017, when credit growth dropped to 0.8 per cent for public sector banks and to 4.4 per cent overall, with foreign banks seeing credit shrink by 8.6 per cent. 

There are some positive signals. NPAs