'Banks' fresh slippages to rise amid stress in retail and MSME segment'

OVERALL ASSET QUALITY REMAINS STRONG: REPORT

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Fresh slippages in the banking sector are expected to rise in the near term due to emerging stress in the retail and MSME segments, even as overall asset quality remains strong, a report said on Wednesday.

Despite this, the report expects the impact on overall asset quality to remain limited, with GNPAs and net NPAs (NNPAs) projected to stay at benign levels, the report by ICRA and ASSOCHAM said.

‘The report said the sector's headline asset quality metrics continue to improve, with gross nonperforming assets (GNPAs) at a decadal low, supported by contained slippages and steady recoveries that have reduced the stock of bad loans.

Further, on the credit growth front, ICRA expects a slightly higher credit growth of Rs 25-26 lakh crore, or 13.7-14.3 per cent year-on-year growth for FY26. For FY27, credit expansion is expected to be Rs 23.50-25 lakh crore.