Consolidated balance sheets of scheduled commercial banks (SCBs) saw double-digit growth in the 2022-23 fiscal year. The Reserve Bank of India (RBI) has released a report on the trends and progress of banking in India for FY22 and the eight months of the current fiscal.
The central bank said this is the first time it is seeing double-digit growth in banks' balance sheets after seven years. Growth in the balance sheets hit a 10-year high in the first half of the present fiscal. The banks' capital to risk weighted assets ratio strengthened from 16.3 percent in March 2021 to 16.8 percent in March 2022.
The RBI said all banks met the regulatory minimum cap requirement of 11.5 percent, common equity tier (CET-1) ratio requirement of 8 percent. The gross non-performing assets (GNPAs) of banks have been declining sequentially from FY18's peak to 5.8 percent by March 2022-end.
The GNPA decline is led by lower slippages and reduction in outstanding GNPAs. The banks' profitability was boosted by acceleration in income and contraction in expenditure, the RBI stated.
The financial performance of urban co-op banks also improved in FY22 and it was helped by augmented capital buffers and a decline in the GNPA ratio. The non-banking financial company (NBFC) sector maintained comfortable liquidity buffers in FY22. The NBFC sector maintained adequate provisioning and a strong capital position through FY22.
The NBFC sector also saw its asset quality improve through FY22.
(Edited by : Shoma Bhattacharjee)
