The ratio of Gross Non-Performing Assets (GNPA: loan accounts overdue for 90 days or more) in Indian banks decreased in FY20 and FY21 (upto September) despite the impact of COVID-19 and the economic downturn that preceded it.
This was mostly due to three factors: 1) Banks wroteoff relatively more NPAs in FY20 to clean their balance sheets; 2) Some large NPA accounts got resolved through debt-recovery channels; and 3) It is not known what share of loan accounts, which were under COVID-19-related moratorium, will turn into NPAs in the immediate future.
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Unknown titleo worsen Share Article 0 PRINT A A A The Reserve Bank of India headquarters in Mumbai. File | Photo Credit: Reuters Three key factors could explain why the bad loans problem is likely to worsen <span>The ratio of Gross Non-Performing Assets (GNPA: loan accounts overdue for 90 days or more) in Indian banks decreased in FY20 and FY21 (upto September) despite the impact of COVID-19 and the economic downturn that preceded it. This was mostly due to three factors: 1) Banks wroteoff relatively more NPAs in FY20 to clean their balance sheets; 2) Some large NPA accounts got resolved through debt-recovery channels; and 3) It is not known what share of loan accounts, which were under COVID-19-related moratorium, will turn into NPAs in the immediate future. Fall and rise After peaking in FY18 (11.2%), the GNPA ratio of all commercial banks fell in FY19 (9.1%) and FY20 (8.2%). It continued to decline in FY21 (7.5% as of Sept. 2020). The GNP Summary
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