'NPAs to hit 4.5% by March'

Dec 12 2013, 03:30 IST
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SummaryDeterioration in asset quality continues to be the major factor impacting profitability of banks in the near future.

Care Ratings has forecast that the gross NPA ratio of domestic banks will spike to 4.5 per cent of the advances by March 2014 from the level of 3.98 per cent in September 2013 and impact the profitability by up to 30 per cent.

ďDeterioration in asset quality continues to be the major factor impacting profitability of banks in the near future. The overall gross NPA ratio for the banks under study would be around 4.5 per cent by March 31, 2014 with higher proportion coming from public sector banks whose gross NPA ratio is estimated to rise to around 5 per cent,Ē the rating agency said in a study. It said banks will have to provide more for restructured assets as per the RBIís guidelines.

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