Annual Report of RBI-2021
Annual report 2021 has been published by the Reserve Bank of India. This report highlights that asset quality of banks and their preparedness requires close monitoring for higher provisioning for the upcoming quarters. Earlier, the Reserve Bank of India (RBI) in its semi-annual financial stability report highlighted that bad loan ratio of banks could rise to 13.5% under the baseline stress scenario by the month of September 2021. RBI has also transferred an amount of Rs 99,122 crore to the government as surplus last week.
- In this report, the RBI has cautioned that banks being lenders will have to provide clear picture of bad loans after the Supreme Court lifted interim stay on classifying non-performing assets (NPA) in the month of March 2021.
- According to the report, if the compound interest accumulated on all loan accounts that had opted for moratorium during the March to August period of 2020 is waivered, then it would put stress on the financial health of the banks operating in India.
- Gross NPA ratio of the banks has decreased from 8.2% calculated in March 2020 to 6.8% in the month of December 2020.
- RBI’s earnings from foreign exchange transactions rose to Rs 50,629 crore in 2020-21 from Rs 29,993 crore previously.
- Provision Coverage Ratio (PCR) of the banks improved to 75.5 % by December 2020 from previously reported 66.6% in March 2020. This change can be noticed due to prudent provisioning by banks above the regulatory prescriptions on accounts undergoing restructuring and availing moratorium.
- Earlier the Capital to risk-weighted assets ratio (CRAR) of banks was 14.8% in March. This increased to 15.9% by the month of December 2020.
- Rupee gained by 3.5% but underperformed in comparison to other Asian currencies.
- Gross NPA ratio for non-banking financial institutions (NBFCs) increased to 6.8% in March to 5.7% calculated in December 2020.
- Capital adequacy ratio of NBFCs increased from 24.8% in December 2020 from 23.7% in March.
- Capital adequacy ratio of Non Banking Financial Companies (NBFC) increased from 24.8% calculated in December 2020 to 23.7% in March.
- RBI balance sheet size increased by 6.99%.
About Reserve Bank of India
Formed: 1st April, 1935
Governor: Shaktikanta Das