As bad loan recognition process nears completion, gross non-performing loans of banks improved to 9.1 per cent as of end-September 2019, compared to 11.2 per cent in FY18, says an RBI report.
Net non-performing assets (NPAs) of all commercial banks reduced to 3.7 per cent in FY19 as against 6 per cent in FY18.
“The gross NPA ratio of all banks declined in FY19 after rising for seven consecutive years, as recognition of bad loans neared completion,” RBI said in its report on Trend and Progress of Banking 2018-19.
It said the improvement in asset quality was driven by state-run lenders that experienced a drop both in the gross NPA (GNPA) and net NPA ratios.
Decline in the slippage ratio as well as a reduction in outstanding gross NPAs helped in improving the GNPA ratio, the report said.