A report on financial stability issued by Reserve Bank of India (RBI) has raised concerns over the increase in nonperforming assets in the last fiscal. The banking and monetary regulator also added the global macroeconomic crisis have added to the woes of the banking sector
The report also raised concerns over the falling growth rate in credit growth, which fell from 22.6% to 16.3%, the condition accentuated by a 43.9% growth in the NPAs. The deposits also fell to a decade low of 14%.
As on 31st March 2012, the Net NPAs ratio as a percentage of total advances stood at 1.3% against 0.9% in the FY11. The NPA ratio for banks in growing economies like China and Brazil was below zero.
Slippages or the number of loans entering into the bad loans category also increased from 1.6% to 2.1 over the year. Seeing the rising trend in slippages relative to recoveries, the RBI asked the banks to take proactive measures to reduce the NPAs and slippages.