The Reserve Bank of India (RBI) Governor Shaktikanta Das said Friday the financial parameters for banks and non-banking financial companies (NBFCs) continue to be strong amid narrowing credit deposit gaps and proactive regulatory oversight.
“The incoming data suggests that the gap between growth of credit and deposits of banks has narrowed with deposits keeping pace with loan growth,” Governor Das said. The year-on-year growth of outstanding credit and deposit were 12.4% and 11.6%, respectively as of November 15, 2024.
Asset quality of the banking system is robust with gross non-performing assets (GNPA) ratio of scheduled commercial banks (SCBs) has fallen to a historic low of 2.54% as of September 2024, the best since March 2011. Also, annualised slippage ratio dropped to 1.35%, down from 1.70% a year earlier, showing improvement in asset quality. Early stress indicators, such as the SMA-2 ratio, are stable at 0.88%.
The RBI said its supervision of the financial sector and its entities continues to be vigilant and proactive.
“The Reserve Bank’s supervision of the financial sector and its entities continues to be vigilant and proactive. Incipient signs of stress, if any, either at the systemic or entity levels, are monitored closely and proactive action is initiated. The effort is always to resolve the issues non disruptively,” the RBI said.
Only in extreme cases where sufficient corrective action is not visible, RBI resorts to imposition of business restrictions as a last resort in the interest of consumers and financial stability.
In the recent past RBI has taken measures against institutions such as Paytm Payments Bank, JM Financial, and IIFL Finance to ensure compliance and governance. In October, the RBI barred four NBFCs, including Navi Finserv, from issuing loans due to governance lapses.
