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Context is everything.
Detailed stories on technology startups, business and economic current affairs.
Detailed stories on technology startups, business and economic current affairs.
Improved NPA ratios seem to indicate that Indian banks have turned a corner when, in reality, the reasons behind the record low numbers point at serious emergent risks.
Indian banks seem to be the picture of health, at least in terms of asset quality. Going by the 2023-24 financial results, 26 of the 40 listed banks—cutting across private sector, public sector and small finance banks—reported net non-performing assets below 1%. Better still, the consolidated average NNPA ratio of all Indian scheduled commercial banks was at a record low of just 0.8%.
That’s a long way from when the overall banking sector’s asset quality—measured in terms of NNPAs—deteriorated to over 6% between early 2017 and 2018. Banks then saw their profitability take a hit, with some even requiring recapitalization …
The acquisition of IDBI Bank puts his Fairfax smack dab in the middle of the RBI’s rules on bank ownership. It must now decide whether to sell CSB Bank or merge the two lenders, neither of which will be easy.
Lenders stand to gain a lot more than borrowers in the current challenging market environment
Aggressive expansion, continued dependence on its parent for business, and an adverse shift in the product mix weigh on profitability as well as investor sentiment.
