New NPA accounts getting added to the existing NPA figures has considerably decreased during the last one year, as reported by CIBIL. The reasons attributed for the decrease are:
- Early recognition of such NPAs by banks
- Improvement in Corporate Health.
- This is expected to bring down the stress in the entire banking system
- Out of Rs. 54.2 lakh crore of loans in the banking system, around 19% or Rs. 10.4 lakh crore has been declared as NPA as on March 2018.
- This means this figure has come down from 16% or by Rs. 8 lakh crore out of the total of Rs. 49.4 lakh crore in the month of March last year.
- CIBIL estimates that total unrecognized NPAs has come down from Rs. 5.5 lakh crore in March 2017 to Rs. 3.1 lakh Crore in March 2018 which indeed is a health reversal trend.
- It may also be noted that CIBIL, in addition to the NPAs already declared by Banks, also monitors unrecognized NPAs, which are nothing but loans declared NPAs by a set of Banks, but still are accounted as Standard in another set of banks.
- A slow movement in these loans towards recovery means, that the process of new NPAs being included is also slowing down which otherwise indeed is a healthy sign.