Large borrower loan accounts and bad debts decline for SCBs: RBI

The share of large borrowers for regular commercial banks (SCBs) has declined lately, while their share in gross non-performing assets (GNPAs) has also declined, the Reserve Bank of India (RBI) said.

According to the RBI’s Financial Stability Report of June 22, the share of heavy borrowers, those with global fund-based and non-fund-based exposure of Rs 5 crore and above, has been declining in recent years.

This indicates reduction in credit concentration and diversification of borrowers.

Their share in the total SCB GNPA moderated slightly to 62.3% during the second half of 2021-2022 and remained well below its September 2020 level (75.6%).

The GNPA ratio for large borrowers has declined over the past two years to reach 7.7% in March 2022, the RBI said.

With the pick-up in industrial activity in the second half of the year, the share of the top 100 borrowers in SCB’s total loan portfolios as well as SCB’s GNPA increased.

These borrowers accounted for 17.1% of SCBs’ total credit and 6.9% of their GNPA, according to the RBI report.

According to the report, SCB asset quality continued to improve throughout the year, with the GNPA ratio falling from 7.4% in March 2021 to a six-year low of 5.9% in March 2022. .

The net non-performing assets (NNPA) ratio also decreased by 70 basis points in 2021-22 and stood at 1.7% at the end of the year.

The slippage ratio, measuring further NPA increments as a share of standard advances at the start of the period, declined across all banking groups in 2021-22.

The write-off rate decreased for the second consecutive year to 20% in 2021-2022.



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