Banks GNPA Update: There has been a decline in the Gross NPA (Gross Non-Performing Assets) of the country’s banks. Banking sector regulator Reserve Bank of India has said that the process of improving the asset quality of banks started in the year 2018-19 and it continued in the first half of the financial year 2022-23 and 2023-24, after which September 2023. At the end, the Gross Non-Performing Asset (GNPA) of banks has come down to 3.2 percent.
The Reserve Bank of India has released a report named (Report on Trend and Progress of Banking in India 2022-23) regarding the trends and progress of the banking sector. This report highlights the performance of the banking sector, which also includes the performance of co-operative banks and NBFCs during 2022-23 and 2023-24. According to the report, due to increase in credit to retail and services sectors and increase in deposits in banks, the balance sheets of scheduled commercial banks have seen a jump of 12.2 percent in 2022-23. However, the deposit growth of banks has been lower than the credit growth rate.
According to the RBI report, at the end of the first half of the financial year 2023-24 in September, the gross NPA of banks has come down to 3.2 percent, which was 3.9 percent at the end of March. In 2022-23, due to higher interest income i.e. net interest income and less provisioning, there has been a jump in the net interest margin (NIM) and profits of banks.
It has been told in the Trends and Progress Report of the Banking Sector that in 2022-23, there has been an increase in gross bank credit due to more loans being given to personal loans and services sector. In personal loans, there is a rise in unsecured lending like credit card loans. Due to more loans given to NBFCs, there has been growth in lending in the services sector. According to this report of RBI, the gross NPA of banks till September 2023 has been highest in the agriculture sector. Whereas the lowest has been seen in retail loans.
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