Economic Survey: Banks took Covid shock well but some impact is yet to come

According to the survey, the banking system is well capitalised and the overhang of NPAs seem to have structurally declined even allowing for some lagged impact of the pandemic

The Indian banking system has weathered the economic shock of the pandemic well so far but there is some lagged impact in the pipeline, said the Economic Survey of  2021-22.

According to the survey, the banking system is well capitalised and the overhang of Non-Performing Assets (NPAs) seem to have structurally declined even allowing for some lagged impact of the pandemic.

The gross NPAs ratio of the banking system has declined from 11.2 per cent in 2017-18 to 7.5 per cent at the end-September 2020 to 6.9 per cent at end-September 2021. Similarly, the net NPAs ratio has declined from its highs