oppn parties Improving Health Of The Banking Sector In India

News Snippets

  • Delhi chief minister Arvind Kejriwal, referring to a spate of FIRs for putting up posters in Delhi which said "Modi Hatao, Desh Bachao", said that even the British did not act in such manner
  • The 2023-24 Appropriation BIll, which allows the government to spend Rs 45 lakh crore in the fiscal, was passed by Lok Sabha in 9 minutes without any discussion
  • Sources say that Amritpal Singh fled to Haryana and may now be in Uttarakhand
  • Experts say that Rahul Gandhi's disqualification from Parliament will kick in immediately as the conviction has not been stayed
  • Tatas to invest $2bn in super app Tata Neu
  • Chief Economic Advisor V Anantha Nageswaran has said that inflation will drop as commodity and food prices have fallen
  • Government will define quality norms to ensure better 5G service
  • Stocks tumble again on Thursday after two sessions of recovery: Sensex loses 289 points to 57925 and Nifty goes down by 75 points to 17076
  • Amicus curiae and senior advocate K V Vishwanathan has told the Supreme Court that the changes made in law and three extensions given to the present director of Enforcement Directorate are illegal and will imperil the integrity of the agency
  • Supreme Court says it cannot judicially direct the government to acquire land or buildings near the court for advocates' chambers
  • ISSF Cup shooting: Indian pair of Rhythm Sangwan and Varun Tomar win silver in 10m sir rifle mixed team event
  • WPL: UP Warriorz take on Mumbai Indians in the Eliminator today. The winner will play Delhi Capitals in the finals
  • World Boxing: Four Indians - Nikhat Zareen, Nitu Ghanghas, Lovelina Borgohain and Saweety Boora - enter the frinals in their respective category
  • Bombay HC imposes costs and dismisses a petition by a housing society that sought to have a community-wise cap on residents
  • Delhi Police files 159 FIRs for defacement of public property and 49 for posters saying 'Modi Hatao Desh Bachao'
Rahul Gandhi disqualified from Parliament, Wayanad Lok Sabha seat declared vacant
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.