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Bank NPA: There has been a huge reduction in the bad loans of banks i.e. NPAs. In terms of debt ratio, by the end of March 2023, the bad loans of banks have reached the lowest level of 3.9 percent in 10 years. RBI has released the Financial Stability Report in which these things have come to the fore.
The RBI said in its report that gross and net NPAs have come down from 11.5 per cent and 6.1 per cent in March 2018 to 3.9 per cent and 1 per cent in March 2023. The RBI said that the macro stress test conducted on credit risk has revealed that scheduled commercial banks have adequate capital and will be able to meet the minimum capital requirements even under difficult circumstances.
RBI said in its report that the global economy is facing instability due to the crisis in the banking system of some countries, global political tension and high inflation. RBI said that despite the global crisis, the Indian economy and domestic financial system remain strong due to solid macroeconomic fundamentals.
The RBI said that the economy is developing steadily due to the continued acceleration in economic growth, reduction in inflation, reduction in current account deficit and surge in foreign exchange reserves, reduction in fiscal deficit and strong financial system. According to RBI, due to the healthy balance sheet of banks and corporate, a new credit and investment cycle is being seen, which is working to improve the prospects of the Indian economy.
RBI Governor Shaktikanta Das wrote in the report that since the publication of the last Financial Stability Report, there has been a big change in the condition of the global and Indian financial systems. He wrote that before March 2023, the banking crisis in America and Europe has seen a profound impact on the global financial system. While India’s financial sector has appeared stable and strong, which is evident from the credit and decreasing NPAs of the banks.
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