oppn parties Improving Health Of The Banking Sector In India

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  • The Indian envoy in Bangladesh was summoned by the country's government over the breach in the Bangladesh mission in Agartala
  • Bank account to soon have 4 nominees each
  • TMC and SP stayed away from the INDIA bloc protest over the Adani issue in the Lok Sabha
  • Delhi HC stops the police from arresting Nadeem Khan over a viral video which the police claimed promoted 'enmity'. Court says 'India's harmony not so fragile'
  • Trafiksol asked to refund IPO money by Sebi on account of alleged fraud
  • Re goes down to 84.76 against the USD but ends flat after RBI intervenes
  • Sin goods like tobacco, cigarettes and soft drinks likely to face 35% GST in the post-compensation cess era
  • Bank credit growth slows to 11% (20.6% last year) with retail oans also showing a slowdown
  • Stock markets continue their winning streak on Tuesday: Sensex jumps 597 points to 80845 and Nifty gains 181 points to 24457
  • Asian junior hockey: Defending champions India enter the finals by beating Malaysia 3-1, to play Pakistan for the title
  • Chess World title match: Ding Liren salvages a sraw in the 7th game which he almost lost
  • Experts speculate whether Ding Liren wants the world title match against D Gukesh to go into tie-break after he let off Gukesh easily in the 5th game
  • Tata Memorial Hospital and AIIMS have severely criticized former cricketer and Congress leader Navjot Singh Sidhu for claiming that his wife fought back cancer with home remedies like haldi, garlic and neem. The hospitals warned the public for not going for such unproven remedies and not delaying treatment as it could prove fatal
  • 3 persons died and scores of policemen wer injured when a survey of a mosque in Sambhal near Bareilly in UP turned violent
  • Bangladesh to review power pacts with Indian companies, including those of the Adani group
D Gukesh is the new chess world champion at 18, the first teen to wear the crown. Capitalizes on an error by Ding Liren to snatch the crown by winning the final game g
oppn parties
Improving Health Of The Banking Sector In India

By Linus Garg
First publised on 2022-12-29 08:38:17

About the Author

Sunil Garodia Linus tackles things head-on. He takes sides in his analysis and it fits excellently with our editorial policy. No 'maybe's' and 'allegedly' for him, only things in black and white.

The health of India's banking sector is continuously improving for the last few years, despite the Covid disruption and the resultant stress on borrowers. RBI's Report on Trend and Progress of Banking in India 2021-22, issued on December 27, highlights the fact. The report shows that credit and deposits have grown at a healthy rate. Credit rose to a 10-year high by September 2022 and the good thing was that both working capital loans and term loans saw healthy growth. Capital adequacy ratios, in shambles after the stress of rising NPAs, have now become healthy. Capital adequacy was 14.1 per cent in 2021. It rose to 15.7 per cent in 2022 and further to 16 per cent in September 2022.The best part is that the share of NPAs is declining every successive year. It was at its peak at 11 per cent in 2017-18 and has dropped to around 5 per cent at the end of September 2022.

That the banking sector has managed to put up such a good show is largely due to the intervention of the RBI in setting things right. It focused on cleaning up the balance sheets of banks and its sustained efforts in this regard have paid handsome dividends. Then, it took wise and timely decisions during the economic disruption caused by the pandemic and that helped both the borrowers and the banks. Since then too, with the world facing a recession, the RBI has been tackling both inflation and growth in equal measure. This is also going to help maintain the overall health of the financial sector.

However, some concerns remain. First is the fact that SMA-0 accounts, where payments are overdue anywhere between 0-30 days, are showing a rising trend. This shows that there is increasing stress in the system and loans need to be monitored well. Then, the recovery rate in the assets through the process of Insolvency & Bankruptcy Code is just 33% of total claims. This again calls for better monitoring of stressed accounts. 

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