Ritika
New DelhiOne hour ago
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The problem of non-recoverable loans (NPA) in banks seems to be ending. According to a report by CRISIL, the gross NPAs of banks are likely to come down by 0.90% to 5% by March 2023. Not only this, by March 2024, the situation is expected to improve further, the gross NPA of banks is estimated to be just 4%, which will be the lowest in a decade.
According to the report released on Wednesday, there has been a sharp recovery in the economy after the Kovid epidemic. Due to this, the loan which has become NPA has started getting refunded. Apart from this, loan off-take has also increased and some of the write-offs have started recovering. Due to this, the gross NPA has been decreasing continuously for the last few years. This trend is likely to continue in the coming years. The NPA incident is considered to be the strongest sign of improving the condition of the banks.
NPAs of banks will be less due to three main reasons
- Banks will be able to sell part or all of their NPAs to the National Asset Reconstruction Company.
- With the economy getting back on track, industries started coming back, due to which the loans of banks started coming back.
- Banks wrote off loans worth 10 lakh crores in five years, NPA came down.
Corporate NPAs to come down from 16% to 2%
According to Crisil, the NPA level in corporate loans is expected to fall below 2% by 2023-24. The NPA level in corporate loans stood at 16% as on March 31, 2018.
The written off loans are also coming back
According to LKP Securities, the written off loans have also started coming back. Last quarter, 25-30% of the loans written off of Bank of Baroda were recovered.
