Banks' asset quality to improve after FY18: Icra

PSBs are expected to report relatively healthy return on equity at 10-12 per cent for FY18

Rating agency Icra expects Indian banks’ asset quality woes to peak by FY18 and that resolution process that has started already would eventually bring down the pain.

The rating agency expects the gross non-performing assets (NPAs) of the banking system to reach about Rs 9 lakh crore, or 10.2 per cent of the total loans, against Rs 7.65 lakh crore, or 9.5 per cent as of March 2017.

The failure of the strategic debt restructuring (SDR) mechanism by banks is partly responsible for the recent pile-up of fresh slippages.

“Therefore, the asset quality pressures are also expected to arise from the advances undergoing