Meanwhile, India's banking outlook is likely to improve in the 2022–23 financial year, according to a latest report by India Ratings and Research. Strong credit demand, balance sheet estimates are the reason for their analysis.
Banking credit growth is also expected to be around 10 per cent. For the current financial year, the rate is projected at 8.4 percent. The ratio of gross arrears to loans is 6.1 per cent. Is of the view that adequate capital reserves will be available to public sector banks.
Debt recovery is also expected to pick up on the back of growth in all sectors and rising government spending on infrastructure. The market share of the iconic private sector banks in terms of loans and deposits is expected to increase. Analyzed that private banks are likely to perform well in terms of capital and portfolio management.
Corporate NPAs, on the other hand, are projected to decline from 10.8% in 2020–21 to 10.4% in the current fiscal. The company expects stressful debt in the retail sector to fall to 4.9 percent in 2022–23, and to 16.7 percent in the MSME industry. In the case of the corporate sector, the rate will come down to 10.3 per cent.
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