The findings are part of the 12th round of bankers survey carried out by FICCI -IBA between July and December 2020. The asset quality of banks, which saw some improvement in the second half of 2020, is likely to worsen during the first six months of 2021.
The survey was conducted almost on 20 banks, including public sector, private sector and foreign banks, representing about 59 percent of the banking industry as classified by asset size.
The Reserve Bank of India’s Financial Stability Report, released in January this year, showed that gross non performing assets of banks may rise to 13.5 percent by September under the baselines stress scenario. A non performing asset is a loan or advance for which the principal or interest payment remained overdue for a period of 90 days.
Banks are required to classify NPAs further into Substandard, Doubtful and Loss assets. An asset, including a leased asset, becomes non performing when it ceases to generate income for the Bank.