Banks' bad loans come down to many years' lowest level...

Banks' bad loans i.e. Gross NPA (GNPA) has come down to many years' low level of 2.8 percent. While the Net Non-Performing Assets (NNPA) ratio has come down to 0.6 percent in march 2024. The loan that remains after making provision from the part of the bad loans is called net NPA i.e. pure bad loans.

The Reserve Bank of India has released the 29th edition of the Financial Stability Report on 27 june 2024, in which the risk in the way of the dynamism and financial stability of the indian economy has been reviewed. The reduction in the bad loans of banks has been revealed in this report.

According to this RBI report, the gross NPA of all banks is expected to improve to 2.5 percent by march 2025. But if there is any kind of shock on the economy front, then the ratio of bad loans of banks i.e. gross NPA can increase to 3.4 percent. According to the report, in a situation of severe stress, the share of bad loans of government banks can increase from 3.7 percent in march 2024 to 4.1 percent in march 2025. The gross NPA of private banks can increase from 1.8 percent to 2.8 percent and the gross NPA of foreign banks can increase from 1.2 percent to 1.3 percent.

According to the Financial Stability Report, the global economy is facing the risks of long-term geopolitical tensions, a sharp rise in public debt as well as slow pace of reduction in inflation. However, despite all these challenges, the global financial system remains dynamic and the financial situation remains stable.

According to the report, due to macroeconomic and financial stability, the indian economy and financial system remain fast and dynamic. Improvement in balance sheet, banks and financial institutions are working to support economic activity by giving more loans.