Saturday, April 4, 2020
Home Economy and Finance Gross NPA declines for the first time in seven years, thanks to Insolvency and...

Gross NPA declines for the first time in seven years, thanks to Insolvency and Bankruptcy Code, says RBI report

The non-performing assets reported by banks have shown a decline for the first time in last seven years because of the conducive policy environment and reforms like Insolvency and Bankruptcy Code (IBC), RBI said.

Also Read

OpIndia Staffhttps://www.opindia.com
Staff reporter at OpIndia

The efforts of the Narendra Modi government to clean up country’s banking system from the Non-Performing Assets (NPA) mess seems to be yielding results as the gross non-performing loans of banks improved to 9.1% as of end-September 2019, compared to 11.2% in the fiscal year 2018.

Reportedly, the non-performing assets reported by banks have shown a decline for the first time in last seven years because of the conducive policy environment and reforms like Insolvency and Bankruptcy Code (IBC), the Reserve Bank of India (RBI) said in its report.

“The gross NPA ratio of all banks declined in FY19 after rising for seven consecutive years, as recognition of bad loans neared completion,” the RBI said in its report on Trend and Progress of Banking 2018-19. The report noted that the gross NPAs has declined to 9.1% in March 2019 from 11.2% in March 2018 as recognition of bad loans neared completion.

- article continues after ad - - article resumes -

“Decline in the slippage ratio, as well as a reduction in outstanding GNPAs, helped in improving the GNPA ratio. While a part of the write-offs was due to ageing of loans, recovery efforts received a boost from the IBC. The restructured standard advances to gross advances ratio began declining after the asset quality review (AQR) in 2015 and reached 0.55% at end-March 2019,” the report said.

Read: Why Modi government deserves huge applause for the Insolvency and Bankruptcy code

Further, the report stated that there was a decline in both gross NPA and in the net NPA ratios. However, the deteriorating asset quality of private banks in terms of the GNPA ratio was due to the reclassification of IDBI Bank as a private bank effective January 21, 2019. The GNPA ratio of these banks showed a decline if IDBI Bank is excluded as a private bank, the report stated.

The recovery of stressed assets improved during 2018-19 mainly because of resolutions under the IBC, which contributed more than half of the total amount recovered. However, recovery rates yielded by major resolution mechanisms declined in 2018-19, especially through the SARFAESI mechanism.

“Cases referred for recovery under various mechanisms grew over 27% in volume and tripled in value during the year, leading to a pile-up of bankruptcy proceedings. This highlights the need to strengthen and expand the supportive infrastructure,” the report said.

- Support OpIndia -
Support OpIndia by making a monetary contribution

Trending now

OpIndia Staffhttps://www.opindia.com
Staff reporter at OpIndia

Latest News

Latest updates and important links about COVID-19 coronavirus

Live statistics and tracking of news related to COVID-19 coronavirus with focus on India.

IIT Roorkee and AIIMS Rishikesh develop closed-loop portable ventilator named as ‘Praan-Vayu’ for COVID-19 patients

The ‘Praan-Vayu’ Ventilator is based on controlled operation of the prime mover that delivers enough air to the patient.

Madhya Pradesh: Police register FIR against fruit vendor after a video of him contaminating the fruits with his saliva goes viral

The police registered the FIR against the fruit vendor on the basis of a complaint lodged by a youth named Bodhraj Tipta

Tablighi Jamaat members kept in Madhu resort in Agra throw tantrums, refuse to eat prescribed healthy food, demand spicy beef biryani

Tablighi Jamaat members are turning out to be quite a headache for the authorities and medical staffs

Karnataka: Muslim mob pelts stones at police officials after being stopped from offering mass namaz defying coronavirus lockdown

Muslim mob in Hubbali attacked police personnel with stone pelting when the cops tried to stop them from offering namaz en masse

No pills, Sharing unwashed utensils, washroom and water for Wuzu: How Tablighi Jamaat’s lifestyle made them super-spreaders

Man who had stayed at Delhi centre of Tablighi Jamaat said that poor community practices were reasons they emerged as 'super-spreader'

Recently Popular

“May Allah send a virus that kills 50 crores Indians”: Bengal Maulvi roared from the stage, video goes viral

May Allah send such a terrible virus to India that ten to twenty to fifty crore people die in India, the Maulvi said to an applauding crowd

Tablighi Jamaat members kept in Ghaziabad hospital roam naked in the ward, make lewd gestures toward female staff

The Chief Medical Officer of the District MMG Hospital in Ghaziabad has written a letter to the Ghaziabad police informing about criminal behaviour of the Jamaatis

Did you know that the Prime Minister’s National Relief Fund has always had the President of Congress party in its managing committee

After PM Modi launched PM CARES Fund, a lot has been discussed about similarities and differences between PM CARES Fund and PMNRF

Nasik police arrest Muslim man after video of him wiping his face with currency note and saying “Coronavirus is Allah’s punishment to you” went...

The man was seen saying that the coronavirus has no treatment because it is sent by ‘Allah’, while licking the notes

Ummah above gender: The Wire journalist refuses to believe nurses’ complaint about Tablighi Jamaatis harassing them

The Wire editor Arfa Khanum Sherwani has declared Tablighi Jamaatis innocent and indulges in Muslim victim-mongering, accusing nurses of lying

Subscribe to our newsletter

Each morning, get an email to keep updated with all the news, opinions and analysis published by OpIndia.

Connect with us

217,368FansLike
271,160FollowersFollow
211,000SubscribersSubscribe
Advertisements