Gross NPAs of banks fall to decade low

Significant improvement in the performance of banks in the September quarter

MUMBAI: The Gross Non-Performing Assets (NPA) ratio of the country's banks continued to improve in the second quarter of the current financial year as well. Gross NPAs fell to a decade low in the September quarter, according to data released by the Reserve Bank of India.

Banks' NPAs have started to improve since 2018-19 and were maintained in the first six months of the current financial year.

The Reserve Bank said in a report that the GNPA ratio which was 3.90 percent at the end of 2022-23 has decreased to 3.20 percent at the end of September. Net NPAs also fell to a multi-year low of 0.80 percent.

The report noted that the country's banking system and non-banking financial companies are resilient. Earnings of banks have seen a sharp improvement over the last two years.

Apart from the RBI's measures including early identification of bad loans, strict monitoring of banks' operations, the decline in NPAs is being seen.

Credit growth in the banking system has also been in double digits. Keeping in mind the continuous increase in credit, there is a need to strengthen the administrative operations and risk management system.

The consolidated balance sheet of commercial banks grew by 12.20 percent in the last financial year, which was the highest figure in the last nine years. Apart from banks, the balance sheet of NBFCs has also seen a rapid increase.

Bank fraud at six-year low

Fraud reported by banks has fallen to a 6-year low. A Reserve Bank report shows that the average size of the amount involved in fraud is at a decade low. However, fraud in banks has increased. While 7,263 cases of fraud were reported in 2020-21, this number has increased to 13,576 in 2022-23. At the same time, the amount of fraud has come down significantly and has come down from Rs 1,18,417 crore to just Rs 26,632 crore during the period. has increased manifold, while the amount involved in these frauds has decreased by 85 percent during this period.