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Gross NPA ratio of banks declined following early resolution of stressed assets: RBI

RBI said the steadfastly pursued recognition, repair and resolution has resulted in the gross NPA ratio declining. The initial teething difficulties, the insolvency and bankruptcy code is proving to be a game-changer. The report has added that recoveries have gradually improved and as a result, deadlock in the potential path of the investment cycle are easing. 

The Capital buffers have been strengthened by recapitalisation to the tune of Rs 2.7 lakh crore, including the budgetary allocations for FY20 and the abatement of stress has rekindled bank credit inflows, which are getting broad- based. The report also notes that the new NPA recognition and resolution norms issued in June 2019 provide incentives for early resolution, with discretion to lenders on the processes. 
 

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