Banks' gross NPA may rise to 12.5% by Mar 2021: RBI FSR

Gross non-performing assets of all banks may jump to 12.5 per cent by the end of this fiscal under the baseline scenario, from 8.5 per cent in March 2020, according to the Financial Stability Report (FSR) released by the Reserve Bank.

Under the ‘very severely stressed scenario’, gross NPA of banks may increase to 14.7 per cent by March 2021, the report said.

“The stress tests indicate that the GNPA ratio of all scheduled commercial banks (SCBs) may increase from 8.5 per cent in March 2020 to 12.5 per cent by March 2021 under the baseline scenario. “If the macroeconomic environment worsens further, the ratio may escalate to 14.7 per cent under the very severely stressed scenario,” the report showed.