NEW DELHI: Bad loans in the banking sector have reached their lowest levels in a decade, the Reserve Bank of India (RBI) said in a report released on Wednesday. It also indicated a further decline in toxic assets by March 2024 under its baseline stress test scenario.
According to RBI’s half-yearly financial stability report (FSR), gross bad loans of banks plummeted to 3.9% of total loans, marking their lowest point since 2013. Additionally, net non-performing assets (NPAs) have also fallen to 1% of total loans—the lowest figure since June 2011. It indicates that banks have been actively setting aside provisions to cover bad loans, RBI added.
“The system-level gross NPAs ratio and net NPAs ratio have sharply fallen from a high of 11.5% and 6.1% in March 2018, respectively…," the report said.
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