Today, the Reserve Bank of India(RBI) has announced its annual report for the year starting from 2021 to 2022. Though the report is fair enough in terms of recovery despite the pandemic persists. But, there may be a high possibility of observing restructuring accounts which may sooner or later face solvency alarms. However, reflecting an impression on the balance sheet of banks.
Banks should be thoughtful now…!!
RBI has shown some cautiousness towards a rising hassle from the loan which got restructured in order to sustain a profitable position. However, we must now put more attention to those books which is reflecting the massive loan amount.
In its annual report, RBI has clearly identified that the banking sector has improved in terms of financial parameters despite the ongoing pandemic outburst.
Moreover, all we need to do is to be more watchful towards the credit behavior of the reorganized advances. As a result, gaining stress and overall deteriorating the health of our economy.
Looking into the RBI data, the nonperforming assets of Indian Banks upsurge from 7.3 percent to 6.9 percent. Furthermore, 6.9 percent stood in the month of September and 7.3 percent stood in the month of March 2021.
Sources reveal that banks should focus on negated accounts and proactively come out with a solution. An Indian economy is heading towards its recovery path thereby pulling the demand for credit. So, we would suggest that banks be more intent on providing credit facilities rather than focusing on the risks associated.
We all are cognizant that in late February 2022 war initiates and blows our world’s economy brutally. There were geopolitical tensions all over the globe like several sanctions, spiked inflation, disruptions in the supply chain, and different waves of pandemics. However, head our market to be directionless for a certain period of time.
Our Indian economy is getting relatively better these days and we may hope our country to be a prevailing one.
In order to handle the concerns, RBI has now decided to make a balance between innovation and regulation thereby without any comprise in risk management.