RBI Stress Test Shows Gross NPA of Banks May Rise to 12.5 %
The report further said the ratio may escalate to 14.7 percent under a “severely stressed scenario”.
Gross Non-Performing Assets (NPA) of all banks may increase from 8.5 percent in March 2020 to 12.5 percent by the end of the fiscal year, the 21st issue of the Financial Stability Report revealed on Friday, 24 July, reported PTI.
“If the macroeconomic environment worsens further, the ratio may escalate to 14.7 percent under a severely stressed scenario.”RBI report
Earlier, at an event organised by the National Council of Applied Economic Research (NCAER), RBI Governor Raghuram Rajan had said the level of NPAs would be unprecedented in six months’ time, if these were recognised at their true level.
Response to COVID-19
According to ANI, the report also said that an amalgamation of fiscal, monetary and regulatory interventions, taken in response to the COVID-19 crisis, have ensured normal functioning of financial markets.
The RBI further said:
“Actions undertaken by financial sector regulators and the government to mitigate the impact of COVID-19 eased operational constraints and helped in maintaining market integrity and resilience in the face of severe risk aversion.”
(With inputs from PTI, ANI.)
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