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Asset quality set to worsen, but banks resilient enough: RBI report

The GNPA ratio of PSBs, which was 8.8 per cent in September this year, may deteriorate to 10.5 per cent by September 2022 under the baseline scenario

RBI ( Bloomberg)
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RBI says in financial stability report that stronger recovery hinges on revival of private investment and private consumption; both are below pre-pandemic levels ( Photo: Bloomberg)

Anup Roy Mumbai
Indian banks’ asset quality may deteriorate but lenders have enough capital to withstand a severe shock, said the bi-annual Financial Stability Report, prepared taking inputs from all the financial regulators and released by the Reserve Bank of India (RBI), on Wednesday.

A similar sentiment was expressed by the RBI’s trend and progress report released on Tuesday. It had said the asset quality of banks and non-banking financial companies (NBFCs) will witness pressure as regulatory forbearance and standstill on asset classification come to an end in a few months.

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