NEW DELHI: The gross non-performing assets (GNPA) of banks could jump to 9.5 per cent in September 2022 from 6.9 per cent in September 2021 if India's economic situation worsens, the Reserve Bank of India (RBI) warned in its Financial Stability Report released on Wednesday.
The report said that even if the economic factors remain unaffected, the GNPAs could hit 8.1 per cent by September next year.
The report reflects the collective assessment of the Sub-Committee of the RBI’s Financial Stability and Development Council (FSDC) on risks to financial stability and the resilience of India's financial system.
"Scheduled commercial banks would, however, have sufficient capital, both at the aggregate and individual levels, even under stress conditions," the report said.
The capital to risk-weighted assets ratio (CRAR) of scheduled commercial banks (SCBs) rose to a new peak of 16.6 per cent and their provisioning coverage ratio (PCR) stood at 68.1 per cent in September 2021.
Global economic recovery has been losing momentum in the second half of 2021 in the face of resurfacing Covid-19 infections, especially the new variant Omicron. Other worrying factors including supply chain disruptions and bottlenecks, rising inflation and shifts in monetary policy stances and actions across both advanced economies and emerging market economies, according to the report.
On the domestic front, progress in vaccination has enabled the recovery to regain traction after the debilitating second wave of the pandemic in mid-2021. The corporate sector is gaining strength and bank credit growth is improving, the report said.
