Solvency position of PSBs worsens

If banks were to provide for all these bad loans, it would wipe off 63% of their net worth

A Business Standard analysis of 23 public sector banks shows that at the aggregate level, the solvency ratio (which is the ratio of the banks’ net non-performing assets, or NPAs, to net worth) has risen to 63.1 per cent at the end of Q3FY17, up from 60.9 per cent at the end of Q4FY16. 

This means, if banks were to provide for all these bad loans, it would wipe off 63 per cent of their net worth. At the end of Q2FY16, the ratio was 32.9 per cent. 

Experts contend the situation might deteriorate in the ongoing quarter. 

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