In the bi-annual Financial Stability Report (FSR) released by the Reserve Bank of India (RBI) on Monday, the central bank said that the total gross non-performing assets (GNPAs) of scheduled commercial banks may rise to 13.5% by September 2021 under the baseline scenario, when compared to 7.5% in the year-ago period.
RBI also said that GNPAs could escalate to 14.8% by September 2021 under a severe stress scenario.
For public sector banks, the GNPA ratio is estimated to rise to 16.2% by September 2021, under the baseline scenario, from 9.7% a year ago.
In comparison, the ratios for private sector banks and foreign banks may rise from 4.6% and 2.5% in September 2020 to 7.9% and 5.4%, respectively, in September 2021, RBI said in its report.
System-level capital adequacy ratio could drop to 14% by September 2021 from 15.6% at the end of September 2020.
The central bank also said that four banks may fail to meet minimum regulatory capital level by September if they fail to infuse capital while under a severe stress scenario, nine banks may fail to meet the minimum regulatory capital level.
"Several banks may fall below minimum regulatory capital at the individual bank level in severe stress. Banks need to assess stress situation and raise capital proactively," added the RBI.