New Delhi, December 15 (IANS). Due to the policy changes made by the government, India’s banking system has seen major improvements and the gross NPA of scheduled commercial banks has declined by more than 8.5 percent in the last six years.
According to the information given by the Finance Ministry, the gross non-performing assets (NPAs) of the country’s scheduled commercial banks have come down to 2.67 percent by June 2024, which was 11.18 percent by March 2018.
A post by the ministry on social media platform
NPA is the loan which has not generated income or interest on the principal amount for a certain period for the banks. If the loan borrower has not paid the interest or principal amount for at least 90 days, the principal amount is declared NPA by the bank.
Provisional Coverage Ratio (PCR) is the ratio or amount that is kept by the bank to recover the loss incurred from bad loans.
With reduction in NPA, there has been a big jump in the profits of scheduled commercial banks.
In the financial year 2023-24, all scheduled commercial banks together had registered a profit of Rs 23.50 lakh crore, which was Rs 22.63 lakh crore in the financial year 2022-23.
Apart from this, there has also been a decrease in the gross NPA of public sector banks and it has come down to 3.12 percent in September 2024, which was 4.97 percent in March 2015 and 14.58 percent at its peak in March 2018.
The results of the recent stress test conducted by the Reserve Bank of India have shown that scheduled commercial banks are well capitalized and all parties are able to withstand large economic shocks even in the absence of any additional capital infusion.
–IANS
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