According to the Reserve Bank of India's June Financial Stability Report (FSR), the Gross Non-performing Assets (GNPA) ratio dropped to a multi-year low of 2.8% at the end of March 2024, indicating that the Indian economy and financial system are still strong and resilient.
At the end of March 2024, the GNPA ratio of Scheduled Commercial Banks dropped to a multi-year low of 2.8%, while the Net Non-performing Assets (NNPA) ratio dropped to 0.6%. "The macroeconomic and financial stability that underpins the Indian economy and financial system keeps them strong and resilient. It stated that banks and other financial institutions are sustaining loan expansion while bolstering economic activity with better balance sheets.
According to the report, as of the end of March 2024, SCBs' capital to risk-weighted assets ratio (CRAR) and common equity tier 1 (CET1) ratios were 16.8% and 13.9%, respectively.
The report states that macro stress tests on credit risk show that SCBs could meet minimum capital requirements; under baseline, medium, and severe stress scenarios, the system-level CRAR in March 2025 is projected to be 16.1%, 14.4%, and 13.0%, respectively.
It said that these scenarios are strict conservative evaluations under fictitious shocks and that the findings shouldn't be taken as predictions.
According to the research, Non-banking Financial Companies (NBFCs) are still in good condition as of the end of March 2024, with their respective CRAR at 26.6%, GNPA ratio at 4.0%, and Return On Assets (RoA) at 3.3%. The report said that the world economy is facing increased risks due to protracted geopolitical tensions, high levels of public debt, and the slowdown in the final mile of deflation.a It stated that in spite of these difficulties, the world financial system has persevered and that the state of the economy is stable.
