Banks’ gross NPA ratio (GNPA) may increase to 10.8 per cent by March 2018 and further to 11.1 per cent by September 2018, according to RBI’s Financial Stability Report. The banking regulator however, feels that stress in the banking sector may be bottoming out, which comes as a good news for banks. The other positive news is that credit growth of scheduled commercial banks has shown an improvement between March and September 2017.
The gross non-performing advances (GNPA) ratio of banks increased from 9.6 per cent to 10.2 per cent between March and September 2017. Private sector banks (PVBs) registered a higher increase in GNPAs of 40.8 per cent as compared to their public sector counterparts (17.0 per cent).
The report further says that financial savings in the form of mutual funds (MF) investments and pension schemes not only continued to grow, but, are also getting broad-based in terms of the spatial distribution and investor profile.
The financial stability report also dwells upon demonetisation and says that the withdrawal of Rs 500 and Rs 2000 notes had a significant impact on financial inclusion.
The total number of savings bank deposit accounts post-demonetisation increased from 504 million in October 2016 to 533 million by March 2017, while the outstanding amount in such accounts rose from 732 billion to 976 billion during the corresponding period, a 33 per cent increase.