RBI: Bad loans are a concern

Nov 09, 2010 |

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Mumbai, Nov. 8: The Reserve Bank of India has expressed concern over the rising bad loans within the banking system, even as its capital adequacy ratios remain robust.

The RBI in its statutory report on “Trends and Progress of Banking” pointed out that the gross NPA ratios of the domestic banks remained unchanged at 2.25 per cent in 2007-08 when the global financial crisis was at its peak.

But strangely, “during FY10, gross NPA ratio increased to 2.39 per cent. After netting out provisions, there was a rise in the net NPA ratio from 1.05 per cent by March 2009 to 1.12 per cent in March 2010,” the report said.

However, the fact that the asset quality of domestic banks has generally seen a steady improvement, as evident from a declining level of gross and net NPA ratio since 1999.

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