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.
Substandard assets: Assets which has remained NPA for a period less than or equal to 12 months.
Doubtful assets: An asset would be classified as doubtful if it has remained in the substandard category for a period of 12 months.
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.”
