Bank NPAs at decadal low: RBI report
The share of large borrowal accounts (with total exposure of Rs 5 crore and above) in total advances declined to 46.4% at end-March 2023 from 47.8% a year ago.
The Reserve Bank of India (RBI) in its banking trend report for 2022-23 says that the gross non-performing asset (GNPAs) of scheduled commercial banks fell to the decadal low of 3.2% at end of September 2023. As per the report, the amount of NPAs decreased for all bank groups, except small finance banks.
The share of large borrowal accounts (with total exposure of Rs 5 crore and above) in total advances declined to 46.4% at end-March 2023 from 47.8% a year ago. Their contribution to total NPAs also fell during the year to 53.9% from 64.0%. The SMA-1 and SMA-2 ratios, which indicate potential stress, declined across bank groups for overall as well as large borrowal accounts.
Special Mention Account-1 or SMA-1 is a loan account where the outstanding amount, either fully or partially, has not been repaid for 31-60 days. SMA-2 are accounts where the amount due is for 61-90 days. Once the amount is due for 91 days, it is classified as NPA.
The slippage ratio, which measures new accretions to NPAs as a share of standard advances at the beginning of the year, moderated during 2022-23 and further in first half of 2023-24. A mix of write-offs, upgradations and recoveries contributed to reduction in NPAs. The RBI report says that during 2022-23, around 45% of reduction in GNPAs of SCBs was contributed by recoveries and upgradations.
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