Synopsis
- Gross Non-Performing Assets (GNPAs) of Scheduled Commercial Banks (SCBs) reduced by 25.6% y-o-y to Rs. 5.32 lakh crore as of June 30, 2023, due to lower slippages, steady recoveries & upgrades and write-offs. Gross NPAs dropped in Q1FY24, despite a healthy growth of advances of 16.7% y-o-y in the same period. The GNPA ratio of SCBs reduced to 3.7% as of June 30, 2023, from 5.7% over a year ago.
- Net Non-Performing Assets (NNPAs) of SCBs reduced by 34.7% y-o-y to Rs. 1.25 lakh crore as of June 30, 2023. The NNPA ratio of SCBs reduced to 0.9% from 1.6% in Q1FY23 which is an all-time low.
- SCBs credit cost (annualised) declined by 16 basis points (bps) y-o-y to 0.52% in Q1FY24. Besides, it has been generally trending down from 1.44% in Q4FY21. Public Sector Banks (PSBs) have been holding substantial buffers for provisions over the last 6-8 quarters along with continuous improvement in the asset quality required a lower level of incremental provisioning, resulting in lower credit cost.
- Restructured assets for select 10 PSBs reduced by 22.4% y-o-y to Rs. 0.97 lakh crore as of June 30, 2023. Meanwhile, restructured assets of select six Private Banks (PVBs) declined by 48.5% to Rs. 0.17 lakh crore due to repayments made by the borrowers, an uptick in the economic activities and also slipping some accounts into the NPAs. Restructured assets (Ten PSBs + Six PVBs) as a percentage of net advances stood at 1.0% as of June 30, 2023, dropping by 60 bps over a year ago period.
- Provision Coverage Ratio (PCR) of SCBs expanded by 326 bps y-o-y to 76.5% Q1FY24 mainly due to improvement in overall asset quality and aggressive provisioning for non-performing assets on the books.
