Crisil has good news for Indian banks: NPAs may not see big increase hereon

Gross NPAs in the banking system are expected to be about 10.5% of advances as of March 2018

Stressed assets in India’s banking system may not rise significantly in the medium term from the current Rs 11.5 trillion owing to the gradual recovery in credit quality of corporates, rating agency CRISIL said on Thursday.

This trend is driven by benefits from higher commodity prices, lower interest rates, improved capital structures, and efficiency gains.

CRISIL expects the creation of fresh non-performing assets (NPA) to decelerate in 2017-18, but the overall stock would continue to rise because slippages would still outpace recoveries.

Gross NPAs in the banking system are expected to be about 10.5 per cent of advances as of