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videos | IST

RBI's Financial Stability Report upbeat on bank capital, sanguine on bad loans

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The RBI has released the Financial Stability Report which shows that bad loans are set to rise but even in the worst-case scenario, gross NPAs across the banking system won't hit double-digits by September next year.

The RBI has released the Financial Stability Report which shows that bad loans are set to rise but even in the worst-case scenario, gross NPAs across the banking system won't hit double-digits by September next year.
The results of the macro stress test show at least that even in the worst-case scenario, we are not going to touch double digits, it is not going to be as bad as what was feared. In fact, these results are better than what the previous FSRs have indicated.
However, this is not a projection of any sort. This is just a stress test result that RBI publishes twice every year. Now according to this from 6.9 percent gross NPA as of September 2021, in a baseline scenario, gross NPAs of all scheduled commercial banks could rise to 8.1 percent by September next year.
In a medium-stress scenario, it could be 8.7 percent and in the worst-case scenario, it will still be 9.50 percent that is below the double-digit mark. However, for public sector banks, the pain is set to be worse.
Watch the accompanying video of CNBC-TV18’s Ritu Singh for more details.