SLUMP IN NON-PERFORMING ASSETS
The gross non-performing assets (GNPA) ratio is the proportion of gross non-performing assets in gross loans and advances. The GNPAs are bad loans which the borrower is not in a position to repay at the moment. A loan turns bad or becomes an NPA if they are overdue for over 90 days. Banks have to set aside (or provision) a part of their profit as a buffer for potential losses that may arise from the NPAs . Thus, NPAs reduce a bank’s available capital to lend fresh loans. News reports say that the quarterly profits of commercial sector banks have touched an all-time high of around Rs.59,000 crore in September 2022. This is more than 50% higher than the profits recorded in the same quarter last year. The finance minister attributed the increase in bank profitability to the sharp reduction in non-performing assets The gross NPAs of the commercial banks have rapidly declined from the peak levels of Rs.10,36,187 crore, which was about 11.2% of their gross asse...