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The good and the bad

Fog over bank NPA lifts, but shadow over NBFCs lengthens

Indian banks seem to have finally got a grip on their bad debt problem. The non-performing assets (NPA) cycle peaked in March 2018, thanks to the relentless drive by the Reserve Bank of India (RBI) over the past four years to make banks recognise their hidden bad assets. With most of the stress identified, the NPA cycle has turned around with the gross NPA ratio declining to 9.3 per cent in March 2019, and is expected to fall to 9 per cent in March 2020, according to the RBI’s Financial Stability Report, released on Friday. Public sector banks’ (PSBs’) gross NPA ratio may ...