Asset quality of banks, which saw some improvement in the second half of 2020, is likely to worsen during the first six months of 2021, a survey showed.
The findings are part of the 12th round of bankers’ survey carried out by FICCI-IBA between July and December 2020.
The survey was conducted on 20 banks, including public sector, private sector and foreign banks.
In the current round of the survey, half of the respondent banks reported a decline in NPAs during the second half of 2020. About 78% of participating state-run banks cited a reduction in NPA levels. “However, in terms of outlook, nearly 68% of respondent bankers expect the NPA levels to be above 10% in the first half of 2021,” the survey showed.
Close to 37% of respondents expect NPA levels to be upwards of 12%.