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NPA situation in banking sector stabilizing: Care Ratings
Feb-15-2019

Highlighting signs of improvement in asset quality of banks, credit rating agency, Care Ratings in its latest report has said that the NPA situation in the banking sector has been stabilising, with slowing growth of NPAs during third quarter of current fiscal as compared to a year ago.

As per the report, gross NPAs rose at rate of 8.4% in Q3FY19, lower than double-digit growth of 30.4% in Q3FY18, due to lower incremental NPAs being generated. However, the rating agency noted that it is still not clear if all legacy NPAs have been recognised by all banks.

The report also found an improvement in growth of credit and deposits in the economy but banks’ net profits continue to remain under pressure. It further noted an improvement in credit to industry as well as services on year-on-year basis for December 2018 compared to December 2017.

Besides, Care Ratings said that growth in credit to services increased significantly, while it was remained marginally lower to agriculture & allied activities during the period. Moreover, personal loans (retail) have registered a double-digit growth showing improved consumption in the country.

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