ALL public sector banks in India show edar eduction in non-performing asset levels over the last six months while only 67 per cent of private sector banks reported a decline during the period, said a FICCI-IBA Bankers’ survey released on Thursday. The survey revealed that 77 per cent of the respondent banks reported a decrease in the NPA levels in the last six months, with public sector banks reporting better asset quality as compared to their private sector counterparts. The 18th round of the FICCI-IBABankers’ survey was carried out for the period July to December 2023. A total of 23 banks, including public sector, private sector and foreign banks, participated in the survey. These banks together represent about 77 per cent ofthe banking industry, as classified by asset size. Over half of the banks covered  in the FICCI-IBABankers’ unveiled on Thursday believe that gross non-performing assets would be inthe range of 3-3.5 per cent overthe next six months.

 

“All responding public sector banks (PSBs) have cited a reduction in NPA levels while amongst participating private sector banks,67per cent of banks have cited a decrease. None of the respondent PSBs and foreign banks have statedanincrease inNPA levels over the last six months while 22 per cent of private banksreportedanincrease,”the survey highlighted. Amongst the sectors that continue to showahigh level of NPAs, most of the participating bankers identified sectors such as Food Processing, Textiles, and Infrastructure. The surveyalsosug gests that the outlook fornon-foodindustry credit over the next six months is optimistic with 41 per cent of the participating banks expecting non-food industry credit growth to be above 12 per cent while 18 per cent feel that non-food industry credit growth would be in the range of 10-12 per cent.

 

Moreover, 36 per cent of there spondents are of the viewthat non-food industry creditgrowth would be in the rangeof 8-10 per cent. “Over half of the respondent banks in the current roundbelieve that Gross NPA swould be in the range of3-3.5 percent over the next six months.14percent of respondents are of theview that NPA levels would bein the range of 2.5-3 per cent,”Ficci stated. As such, term deposits havepicked up pace as reported by the respondent banks.Further, around 70 per cent of respondent shavere portedade crease in the share of CASA depositsin total deposits. According to the survey, 65per cent of respondent banks reported credit standards forlarge enterprises to have remained unchanged asagainst 54 per cent in the lastround.