Financial Stability Report published by RBI reported that Gross Non-Performing Assets of Bank may increase from 7.5 per cent in September 2020 to 13.5 per cent in September 2021 under the baseline scenario. If the macroeconomic condition worsens the rate may go up to 14.8 per cent, the report added.
"These GNPA projections are indicative of the possible economic impairment latent in banks' portfolios, with implications for capital planning. A caveat is in order, though: considering the uncertainty regarding the unfolding economic outlook, and the extent to which regulatory dispensation under restructuring is utilized, the projected ratios are susceptible to change in a nonlinear fashion" report underlined.
Based on the Financial Stability Report, Bank credit growth has declined 5.7 per cent in comparison with last year whereas deposit growth has ranked reflecting the precautionary savings in light of the uncertainty of pandemic. The latest Systemic Risk Survey (SRS) marked risk levels of global risk, macro-economic risks, and financial market risk as in the 'medium' category against the perceived marking of it in 'high' risk during April/ May 2020.
In the report, RBI has claimed that it has taken extraordinary measures and efforts along with other financial regulators and governments to address systemic goals and to develop parts of the financial system.