The shares of the state-owned bank were trading in Reserve bank of India (RBI) has cautioned that assets quality of scheduled commercial banks may worsen next year owing to changes in the macroeconomic scenario. Also, the central bank warned that there remains an inherent risk of ‘frothy condition that precedes a market bubble building up in the system due to excess liquidity. The factor such as an increase in slippages and decline credit growth, the central bank in its biannual commentary which said about the bad loan of SCBs as a percentage of total loans which is expected to increase to 9.9 per cent by September 2020 from 9.3 per cent in September 2019.
In September 2019, Scheduled Commercial Banks’ (SCBs) has credit growth which subdued at 8.7 per cent year on year, through which private sector banks registered doubled digit credit growth of 16.5 per cent. The capital adequacy ratio of SCBs improved significantly after the recapitalization of public sector banks by the government. The gross non-performing assets ratio remained unchanged at 9.3 per cent between March and September 2019.
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