RBI Financial Stability Report, December 2024: banks' GNPA ratio at 12-year low of 2.6%
The Reserve Bank of India released the December 2024 issue of its Financial Stability Report on 30 December 2024.
Summary
The Reserve Bank of India released the December 2024 Financial Stability Report (FSR) on 30 December 2024. The report reflects the collective assessment of the Sub-Committee of the Financial Stability and Development Council (FSDC) on the resilience of the financial system. It shows the gross non-performing asset (GNPA) ratio of scheduled commercial banks falling to a 12-year low of 2.6% in September 2024, with the net NPA ratio at around 0.6% and the half-yearly slippage ratio rising marginally to 0.7%. The provisioning coverage ratio improved to 77.0%, while the capital to risk-weighted assets ratio (CRAR) and CET1 ratio stood at 16.7% and 14.0%. Under the macro stress test's baseline scenario, the GNPA ratio of 46 banks may rise to 3.0% by March 2026.
Key facts
- Released
- 30 December 2024 (December 2024 issue)
- Reflects
- Collective assessment of the FSDC Sub-Committee
- GNPA ratio (SCBs)
- 12-year low of 2.6% (September 2024)
- NNPA ratio
- Around 0.6%
- Slippage ratio
- 0.7% (half-yearly, marginally higher)
- PCR
- 77.0%
- CRAR / CET1
- 16.7% / 14.0%
- Stress test
- GNPA of 46 banks may rise to 3.0% by March 2026 (baseline)
Practice MCQs 3 questions
According to the RBI's Financial Stability Report released on 30 December 2024, the gross NPA ratio of scheduled commercial banks fell to a 12-year low of how much in September 2024?
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Correct answer: D — 2.6%
RBI FSR: the GNPA ratio of SCBs declined to a 12-year low of 2.6% in September 2024; 0.6% is the NNPA ratio and 3.0% the baseline stress-test projection for March 2026.
The RBI's Financial Stability Report reflects the collective assessment of which body on the resilience of the Indian financial system?
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Correct answer: B — Sub-Committee of the Financial Stability and Development Council
RBI press release: the FSR reflects the collective assessment of the Sub-Committee of the Financial Stability and Development Council (FSDC).
Consider the following statements about scheduled commercial banks as reported in the RBI's December 2024 Financial Stability Report (September 2024 data): 1. CRAR and CET1 ratios stood at 16.7% and 14.0% respectively. 2. The provisioning coverage ratio improved to 77.0%. 3. The net NPA ratio stood at around 1.6%. Which of the statements given above are correct?
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Correct answer: A — 1 and 2 only
RBI FSR: CRAR and CET1 were 16.7% and 14.0% and the PCR improved to 77.0%; the NNPA ratio was around 0.6%, not 1.6%, so statement 3 is wrong.