Banks' gross non-performing assets may rise to 13.5% by September 2021, from 7.5% in September 2020 under the baseline scenario, according to Financial Stability Report (FSR) released by the Reserve Bank of India.
If the macroeconomic environment worsens into a severe stress scenario, the GNPA ratio may escalate to 14.8%, the report said.
"The stress tests indicate that the GNPA ratio of all scheduled commercial banks (SCBs) may increase from 7.5% in September 2020 to 13.5% by September 2021 under the baseline scenario," the FSR report added.
Among the bank groups, public sector banks' (PSBs) GNPA ratio of 9.7% in September 2020 may rise to 16.2% by September 2021 under the baseline scenario, it noted.
The gross non-performing asset (GNPA) ratio of private sector banks (PVBs) and foreign banks (FBs) may increase from 4.6% and 2.5% to 7.9% and 5.4%, respectively, over the same period.
In the severe stress scenario, the GNPA ratios of PSBs, PVBs and FBs may rise to 17.6%, 8.8% and 6.5%, respectively, by September 2021, the report said.
"These GNPA projections are indicative of the possible economic impairment latent in banks' portfolios, with implications for capital planning," it added.
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