News Karnataka
Saturday, December 03 2022
Business

Non-Performing Assets Hit Banks’ Profitability In 2018: RBI

Photo Credit :

Mumbai: Non-performing assets (NPAs or bad loans) weighed down the balance sheets of banks necessitating large provisioning, which adversely affected their profitability, especially of state-run banks during 2018, the Reserve Bank of India (RBI) said on Friday.

In its “Trends and Progress of Banking in 2017-18” report, the RBI also said that it is addressing the concerns of non-banking finance companies (NBFCs) over acute liquidity crunch following the series of payment defaults by Infrastructure Leasing & Financial Services (IL&FS) over August-September.

“The overhang of stressed assets weighed down the consolidated balance sheet of the banking sector, necessitating large provisions, which adversely affected their profitability during 2017-18,” the central bank report said.

Recent data for the first-half of 2018-19, however, indicate that the NPAs have begun to stabilise, “albeit at an elevated level; capital positions have been buffered and the provision coverage ratio has improved”.

“The recent concerns about some NBFCs are being proactively addressed. The consolidated balance sheet of NBFCs expanded in 2017-18 and during the first-half of 2018-19,” the RBI said.

“The balance sheets of NBFCs, especially that of companies that provide loan finance, have been growing manifold against the backdrop of relative decline in their cost of lending vis-a-vis banks and subdued credit growth of scheduled commercial banks in the previous three years.”

The central bank said this year can be considered a watershed in terms of setting up of a “new, comprehensive, decisive and credible” NPAs’ resolution framework in February under the mandate of the Insolvency and Bankruptcy Code (IBC).

Share this:
MANY DROPS MAKE AN OCEAN
Support NewsKarnataka's quality independent journalism with a small contribution.

How useful was this post?

Click on a star to rate it!

Average rating 0 / 5. Vote count: 0

No votes so far! Be the first to rate this post.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Leave a Reply

Your email address will not be published. Required fields are marked *

Visit 7Jackpots and find the best online casinos in India! Play the most popular casino games for real money!

Find the best odds at 10Cric and ipl betting 2021! Signup today and get up to a 100% deposit bonus.

To get the latest news on WhatsApp