As per a report by the Reserve Bank of India’s (RBI) Financial Stability Report (FSR) the asset quality of the banking system has improved with gross non-performing assets (GNPA) ratio declining from 7.4 per cent in March 2021 to a six-year low of 5.9 per cent in March 2022.

• Net non-performing assets (NNPA) ratio also fell by 70 bps during 2021-22 and stood at 1.7 per cent at the year-end.
• Stress tests indicate that GNPA ratio of all banks may improve from 5.9 per cent in March 2022 to 5.3 per cent by March 2023 under the baseline scenario driven by higher expected bank credit growth and declining trend in the stock of GNPAs.