The Reserve Bank of India’s trend and progress report provides information on the banking industry’s performance. This includes non-bank financial institutions and cooperative banks.
♦ The report also provides views on the development prospects of India’s financial industry. The report is statutory compliance with the Banking Control Law of 1949.
♦ The report stated that the ratio of total non-performing assets of commercial banks dropped from 9.1% in March 2019 to 7.5% in September 2020. COVID-19 provisions and dividend returns will help protect its balance sheet.
♦ The ratio of capital to risk-weighted assets of fixed-term commercial banks increased from 14.3% in March 2019 to 15.8% in September 2020. This helps public sector banks to inject capital.
♦ After losses in previous years, regular commercial banks’ net profit turned losses into profits in the 2019-20 fiscal year. The planned commercial banks consolidated their earnings after turning losses into profits in the 2018-19 fiscal year.
♦ The Reserve Bank of India has adopted a series of policy measures to mitigate the impact of covid-19.
The main efforts identified in the report are as follows:
♦ Legislative amendments strengthen the scope of supervision of the Reserve Bank of India. This provides the supreme bank with superior power over the cooperative bank.
♦ A series of measures have also been taken to strengthen the supervisory framework.
♦ The 2002 “Financial Asset Securitization and Reconstruction and Enforcement of Security Interests Act” resolved large accounts and helped the economic recovery process through the bankruptcy and bankruptcy law.
♦ The asset quality and profitability of state-owned cooperative banks have improved.
♦ The balance sheet growth of city cooperative banks has slowed in 2019-20. The report stated that the City Cooperative Bank’s asset quality deteriorated, leading to a net loss.