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News: Reserve Bank of India has released the Report on Trend and Progress of Banking in India 2019-20.
Facts:
- About the report: The report is a statutory publication in compliance with Section 36 (2) of the Banking Regulation Act, 1949.
- Purpose: It presents the performance of the banking sector, including co-operative banks, and non-banking financial institutions during 2019-20 and 2020-21 so far.
Key Takeaways:
- Decline in NPAs: Scheduled Commercial Banks(SCBs) gross non-performing assets (GNPA) ratio declined from 9.1% at end-March 2019 to 8.2% at end-March 2020 and further to 7.5% at end-September 2020.
- Strengthened CRAR Ratio: Capital to risk weighted assets (CRAR) ratio of SCBs strengthened from 14.3% at end-March 2019 to 14.7% at end-March 2020 and further to 15.8% at end-September 2020 partly aided by recapitalisation of public sector banks and capital raising from the market by both public and private sector banks.
- Policy Measures: The Reserve Bank also undertook an array of policy measures to mitigate the effects of COVID-19; its regulatory ambit was reinforced by legislative amendments giving it greater powers over co-operative banks, non-banking financial companies (NBFCs), and housing finance companies (HFCs).
- Decline in UCBs Balance Sheet: The balance sheet growth of Urban Co-operative Banks(UCBs) moderated in 2019-20 on lower deposit accretion and muted expansion in credit; while their asset quality deteriorated, increased provisioning resulted in net losses.
- NBFCs: The consolidated balance sheet of NBFCs decelerated in 2019-20 due to near stagnant growth in loans and advances although some improvement became visible.
- Frauds in Banks: The number of frauds reported by banks in April-September 2020 period declined to Rs 64,681 crore from Rs 1,13,374 crore reported in the same period of the previous year.
