In its Financial Stability Report released on Wednesday, the RBI stated that there has been a sharp increase in the large borrowers' share of gross NPAs in the total gross NPAs to 87.4% in September from 78.2% in March.
In its Financial Stability Report released on Wednesday, the RBI stated that there has been a sharp increase in the large borrowers' share of gross NPAs in the total gross NPAs to 87.4% in September from 78.2% in March.
"This is a major concern to the lending institutions and other stakeholders," according to the central bank.
In his foreword to the FSR, RBI Governor Raghuram Rajan says that corporate sector vulnerabilities and the impact of their weak balance sheets on the financial system need closer monitoring.
The RBI has requested public sector banks (PSB) to ensure that they don't overpay dividends since their bad loans could rise further in case there is a deterioration in the economic condition.
Worsening asset quality and sluggish profitability show that risks to banking stability have increased in the past six months, RBI said in its FSR.
The risk to the banking system from the domestic economy has dropped to medium from high, the central bank sai
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