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Non-Performing Asset:  Gross NPAs may rise to 9.9% by next Sept., says RBI report

  • IASbaba
  • December 28, 2019
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Non-Performing Asset:  Gross NPAs may rise to 9.9% by next Sept., says RBI report

Part of: GS Prelims and GS-III Economy

Daily Current Affairs IAS | UPSC Prelims and Mains Exam – 28th December 2019

Daily Current Affairs IAS | UPSC Prelims and Mains Exam – 28th December 2019

SRC: The Hindu

For Mains:

  • The gross non-performing asset (GNPA) ratio of banks may increase to 9.9% by September 2020 from 9.3% in September 2019.
  • due to change in macroeconomic scenario, marginal increase in slippages and the denominator effect of declining credit growth.
  • The asset quality of agriculture and services sectors, as measured by their GNPA ratios, deteriorated to 10.1%
  • Reviving the twin engines of consumption and investment remains the key challenge even while remaining vigilant about spillovers from global financial markets.

Value addition For Prelims:

  • A non performing asset (NPA) is a loan or advance for which the principal or interest payment remained overdue for a period of 90 days.

NPAs classified further into Substandard, Doubtful and Loss assets.

  1. Substandard assets: Assets which has remained NPA for a period less than or equal to 12 months.
  2. Doubtful assets: An asset would be classified as doubtful if it has remained in the substandard category for a period of 12 months.
  3. Loss assets: As per RBI, “Loss asset is considered uncollectible and of such little value that its continuance as a bankable asset is not warranted, although there may be some salvage or recovery value.”

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