According to the latest Financial Stability Report of the Reserve Bank of India, the gross non-performing assets (GNPAs) for scheduled commercial banks (SCBs) declined to 5 per cent in September 2022. In March 2021, the GNPAs for SCBs were at 7.5 per cent of the total outstanding loans. The decline in GNPAs has been slower for non-banking financial companies (NBFCs), as the ratio of bad assets declined from 6.4 per cent to 5.9 per cent during this period (chart 1).
For other banking entities, the GNPAs are still higher. Urban co-operative banks (UCBs) had a GNPA ratio of 12.7, whereas regional rural banks’ (RRBs) ratio was 9.1 per cent (chart 2). The decline in GNPAs and lower provisioning have helped