Banks’ non-performing assets to improve by FY25: Care Ratings.

Syllabus: GS-III; Subject: Economy, Topic: Banking and Financial Intermediaries, Issue: NPAs

Context: Care Ratings report on Indian banks’ non-performing assets.

Synopsis:

  • Gross non-performing assets (GNPA) refers to the total amount of money owed on to banks that are considered past due for a specific period, typically 90 days or more.
  • GNPA is expected to reach 2.1% by Financial Year 2025.
  • Risks: High-interest rates, regulatory changes, liquidity, global issues.
  • Factors: Recoveries, write-offs, reduced slippages, asset reconstruction.
  • Monitoring needed for unsecured personal loans, and restructured accounts.

Prelims Connect(Institutions in news)

CARE Ratings:

·        Role: CARE Ratings is a credit rating agency in India.

·        Credit Ratings: They provide credit ratings for corporates and assist investors in making informed decisions.

·        Impact: Their ratings influence interest rates on bank loans and bond.

·        Regulated by the Securities and Exchange Board of India (SEBI).

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