Lok Sabha Question No. 3107 (UNSTARRED), answered on 2021-03-15
Subject: Stressed Assets of Banks
Ministry: FINANCE
Asked by: Manne Srinivas Reddy, Kotha Prabhakar  Reddy

## GOVERNMENT OF INDIA MINISTRY OF FINANCE

## LOK SABHA UNSTARRED QUESTION NO-3107

ANSWERED ON- 15/03/2021

## STRESSED ASSETS OF BANKS

## 3107. SHRI MANNE SRINIVAS REDDY SHRI KOTHA PRABHAKAR REDDY

Will the Minister of FINANCE be pleased to state:-

(a) whether the estimated overall stressed assets (gross nonperforming assets + restructured assets could rise 30 per cent for the banking system and the increase is almost 1.7 times in the retails segment in the second half of Financial Year 2021-22 and if the comparative details thereof in the last five and current year as on date and reasons therefor; bank-wise; and SO, years

- () whether a lot of the retail stress was from unsecured advances and that it would be seen more in private banks because of theit higher exposure to unsecured loans and the stock of stressed retail assets for Public Sector Banks (PSBs) could rise to 2.9 percent in Financial Year 2021-22 from 2.1 per cent in Financial Year 2020-21 while it could climb from 1.2 per cent to 4.3 per cent for private banks and also expected deposit rates to tise as credit growth revives and capital market flows are enhanced in future and if s0, the details worked out and if not; the reasons for not working out; PSB and private bank-wise ? coming

## ANSWER

## THE MINISTER OF STATE IN THE MINISTRY OF FINANCE

## (SHRI ANURAG SINGH THAKUR)

(2) and (): The Resetve Bank of India (RBI) is the supervisor of the system and releases a Financial Stability Report (FSR), which contains, inter alia, its projections of goss non~performing assets (NPAs) based on macro stress tests. While the latest FSR, of January 2021, does not contain projections in respect of overall stressed advances, stressed retail advances and deposit rates, a8 per the report; the gross NPA ratio of scheduled commercial banks (SCBs), under the baseline scenario, may increase from 7.5 per cent in September 2020 to 13.5 pef cent by September 2021\_ banking

As per RBI inputs, the said gross NPA ratio has been arrived at without factoring in the impact of the policy actions under way, viz , RBIs resolution framework for COVID-19-related stress and onetime restructuring of loans to micro, small and medium enterprises (MSMEs), which aim to facilitate revival of real sector activities and mitigate the pandemic s impact on borrowers  Under the said framework/ scheme,  resolution/ restructuring of eligible loan accounts is permitted without asset classification downgrade. Therefore, the actual movement of gross NPA ratio of SCBs will depend on the extent to which the benefit of the said framework/ scheme is   availed of by the eligible borrowers and facilitates revival and mitigates the pandemic's impact on borrowers.

Bank-wise details of stressed advances as a percentage of the overall advances and stressed retail and at the end of December 2020,as per RBI are at Annex: data, years

| [   |    |    |    |    |    |     |     | 1 [   | 9   |    | H   |       |
|-----|----|----|----|----|----|-----|-----|-------|-----|----|-----|-------|
|     | 2  |    |    |    |    |     |     |       |     |    |     | [ 1 8 |
|     |    |    |    |    |    |     |     | 8     |     |    |     | [ 1 8 |
|     |    |    |    |    |    |     |     |       |     | 6  |     | [ 1 8 |
|     | 5  | 8  | 6  |    |    |     |     |       |     | 8  | 8   | [ 1 8 |
|     | [  |    |    | Cp | 2  | [ [ | e/8 |       |     |    |     | 1     |
|     |    |    |    |    |    |     |     |       |     | 1  |     |       |
|     | 5  |    |    |    |    | 8   |     |       |     |    |     |       |
|     |    |    |    |    |    |     |     |       |     |    | 8   |       |
|     | 6  |    |    |    | G  |     |     |       |     |    |     |       |
|     |    | 5  |    |    | 6  |     |     |       |     |    |     |       |
|     | 0  |    |    |    |    | [ [ |     |       |     |    | 6   |       |

## [ 1

1 6 + 8 L

| L L   | [   | F 8   | H   |
|-------|-----|-------|-----|

| E   | H   | [   | K   | F   | E   | [   | H 8   | H   |
|-----|-----|-----|-----|-----|-----|-----|-------|-----|