RBI’s latest report on ‘Trend and Progress of Banking in India’

India’s central bank, RBI has released the latest iteration of its annual report on the financial performance of the country. In its report, the Reserve Bank of India (RBI) details that, despite the devastation caused by the COVID-19 outbreak in India, the financial performance of banks has improved, citing a fall in the gross non-performing asset ratio for scheduled commercial banks (SCBs).

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The report, titled ‘Report on Trend and Progress of Banking in India,’ also showed how a rise in profitability of SCBs in 2020-21 was driven less by an increase in income but more via reductions in expenditure.

Key Highlights:

• The gross non-performing assets (GNPAs) ratio of SCBs fell from 8.2 per cent at the end of March 2020 to 7.3 per cent in March 2021. This decreased further to 6.9 per cent at the end of September 2021
• Capital to risk-weighted assets ratios(CRAR) – a vital measure of a bank’s stability – of SCBs improved from 14.8 per cent at the end of March 2020 to 16.3 per cent at the end of March 2021
• Banks have been plagued with an increase in the incidences of fraud in the current fiscal.
• The report notes that the number of frauds between April and September 2021 rose in comparison to the corresponding period last year.

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