INSUBCONTINENT EXCLUSIVE:
(GNPAs), or bad loans, ratio in the Indian banking system is likely to rise from 11.6 per cent in March 2018 to 12.2 per cent by the end of
March next year, the Reserve Bank of India said on Tuesday
Referring to the 11 state-owned banks under prompt corrective action framework (PCA) on account of NPAs, the RBI, in its Financial Stability
Report (FSR), also said these may see a worsening of their GNPA ratio from 21 per cent in March 2018 to 22.3 per cent by the end of the
ongoing 2018-19 fiscal."Macro-stress tests indicate that under the baseline scenario of current macroeconomic outlook, SCBs' (scheduled
commercial banks) GNPA ratio may rise from 11.6 per cent in March 2018 to 12.2 per cent by March 2019," it said.Of the 11 banks, six are
likely to experience capital shortfall relative to the required minimum risk-weighted assets ratio (CRAR) of 9 per cent, the central bank
Indian Overseas Bank, Dena Bank, Oriental Bank of Commerce, Bank of Maharashtra, United Bank of India, Corporation Bank and Allahabad
Bank.Though the overall system level CRAR may come down from 13.5 per cent to 12.8 per cent during the period in review, the FSR said
profitability of all commercial banks had declined partly reflecting increased provisioning on account of bad loans."The stress in the
banking sector continues as GNPA ratio rises further," the report said"Spillover risk from advanced financial markets to emerging markets
consolidation, moderation in inflation and a benign current account deficit over the last few years, are changing, thereby warranting
