Gross bad loans of Indian banks are likely to inch up to 1.9% by March 2028 from 1.8% at the end of March 2026, although the banking system is largely expected to remain resilient with strong capital buffers, healthy profitability and improving credit growth, the Reserve Bank of India (RBI) said in its Financial Stability Report (FSR) released on Tuesday.
The central bank said the projected increase in the gross non-performing asset (GNPA) ratio is modest and follows a sustained improvement in banks' balance sheets, with asset quality currently at multi-decadal highs.
