Wholesale NPAs to decline during FY21

 In FY21, bank credit growth was muted (lowest since last four years) as lenders and borrowers remained risk averse due to the pandemic-led uncertainty. NPA for FY21 is estimated at Rs 7.9 lakh crore.  

PSBs accounted for more than 80 per cent of SCBs' GNPA till FY19. Over the last couple of years, PSBs registered substantial contraction in their GNPA amount. They are to be around Rs 6 lakh crore at the end of March 2021.

PSBs NPA ratio moved up by 336 bps in the FY18 to reach 14.1 per cent. Subsequently, the ratio has been on a declining trend.

PVBs have recorded a rise in their GNPA amount from Rs 1.8 lakh crore in March 2018 which breached the Rs 2 lakh crore levels in December 2019 but are expected to have retreated to around Rs 1.96 lakh crore by the end of March 2021.

Despite a challenging year, the quantum of gross NPAs of SCBs are expected to decline by the end of March 2021 as compared with the previous year due to write-offs, lower slippage, restructuring schemes and ECLGS support for MSMEs.

Shivani Sharma, Pragati Srivastava