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RBI CONCERN ON THE QUALITY OF ASSETS Reserve Bank of India has published their Financial Stability Report on 30.12.2024which predicts a Resilient Indian Economy and the economy is expected to improve after the recent slowdown in GDP growth with confidence of the consumer segment and business segmen
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FAQ :
The RBI's Financial Stability Report predicts a resilient Indian economy, expecting GDP growth to recover and showing high levels of consumer and business confidence.
The report highlights concerns about write-offs by private banks potentially masking worsening asset quality in retail loans and increased delinquencies in the microfinance sector.
Under a baseline scenario, the aggregate GNPA ratio of 46 banks may rise from 2.6% to 3% by March 2026, with higher increases under adverse scenarios.
The aggregate capital adequacy ratio (CAR) of major Scheduled Commercial Banks (SCBs) may see a slight decline from 16.6% to 16.5% by March 2026 under a baseline scenario.
The report notes a deterioration in the asset quality of the microfinance sector, with a doubling of overdue loans between 31 to 180 days and a significant increase in borrower indebtedness.
Non-compliance with RBI guidelines and notifications by regulated entities is identified as a major reason for accounts becoming Non-Performing Assets (NPAs).
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