RBI projects a marginal rise in bank bad loans by FY27

Stress test predicts baseline GNPA ratio to rise from 2.3% to 2.5% in two years to March 2027

- Anshika Kayastha

The Reserve Bank of India's stress test has predicted that bad loans of the top 46 banks could rise marginally by March 2027, while their capital buffers would remain adequate even under severe stress.

The Reserve Bank of India projected that the aggregate gross non-performing assets (GNPA) ratio of these banks may rise from 2.3% in March 2025 to 2.5% in March 2027 under the central bank's baseline stress scenario in the banking system, according to RBI's Financial Stability Report released on Monday.

The RBI did not provide the break-up of stress impact on public sector banks compared with their private peers, deviating from the earlier versions of the half-yearly report.