Gross NPAs in MSMEs drop to 6.8%: RBI data

New Delhi, June 30 (KNN) All scheduled commercial banks (SCBs) have seen a decline in gross non-performing assets (GNPA) from 9.3% in March 2022 to 6.8% in March 2023, as per Reserve Bank of India’s (RBI) latest Financial Stability Report. 

This led into the improvement of the asset quality of the MSME portfolio of all SCBs.

It is to note that the improvement in the MSME asset quality profile coincided with the expiry of regulatory forbearance and restructuring schemes introduced since 2018. 

Quarter-on-quarter, the GNPA ratio improved from 7.4% in December 2022 and 7.7% in September 2022 and 9.8% in June 2022.

The GNPA ratio for MSME loans below Rs 25 crore, which are particularly vulnerable to slippage, also declined sequentially from 7.2% in March last year to 6.7% in March this year, the report noted.

In terms of special mention accounts (SMAs), the share of SMAs in the MSME portfolio of SCBs also dropped from 11% in March 2022 to 8.6% in March 2023. 

SMAs are accounts that show signs of incipient stress leading to the borrower defaulting in servicing the debt.  (KNN Bureau)