agencies
NEW DELHI, Mar 9: Bad loans of Indian banks are expected to decline 90 basis points to less than five per cent in FY23 and hit a decadal low of sub-four per cent by March 31, 2024, said an Assocham-Crisil Rating study unveiled on Thursday.
The study attributed the decline in gross Non-Performing Assets (NPAs) to the post-Covid economic recovery and higher credit growth. It said the biggest improvement would be in the corporate loan segment, where gross NPAs are seen falling below two per cent in the next fiscal from a peak of about 16 per cent as on March 31, 2018.
"This follows significant clean-up of books by banks in recent years, as well as strengthened risk management and underwriting, which has led to higher preference for borrowers with better credit profiles. The steady improvement in corporate asset quality is clearly manifested in key indicators such as the credit quality of bank exposures," Assocham Secretary General Deepak Sood said.
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