According to a FICCI-IBA survey, banks’ asset quality may deteriorate in the first half of 2021, improving by the first half of 2020. The deterioration in the quality of the banks’ assets is due to the high difficulty in repayment of the loans they issued.
This is revealed in the 12th round of the Bankers survey between July and December 2020. The survey was conducted in 20 public and private sector banks, including foreign banks. Half of the survey respondents said the NPA was down in the second half of 2020. About 78 percent of those participating in public sector banks have accepted the NPA reduction.
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“However, according to future forecasts, 68 percent of participating bankers said that in the first half of 2021, the NPA (debt ratio declared in real terms for total premiums) would increase by over 10 percent. The Bank of Financial Stability report showed that by September 2021, banks’ total passive assets (NPAs) could increase by 13.5 percent.
