A survey showed that banks’ asset quality, which saw some improvement in the second half of 2020, is likely to deteriorate during the first six months of 2021.
The findings are part of the 12th round of survey of bankers conducted by FICCI-IBA between July and December 2020.
The survey was conducted on 20 banks, which included the public sector, private sector and foreign banks.
In the current round of the survey, half of the latter banks reported a drop in NPAs during the second half of 2020. About 78% of the state-run banks cited a decrease in NPA levels. According to the survey, “However, in terms of outlook, about 68% of the respondent bankers expect NPA levels to be above 10% in the first half of 2021.”
NPA levels are expected to be above 12%, close to 37% of the respondents.
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