Solvency Analysis of the Indian Banking Sector
Assocham Research Bureau
Net non-performing assets (NPAs) of 25 banks have risen by an average 21.75 per cent in Q2
FY ’09 as against Q2 FY’08.
The aggregate net non-performing assets (NPA) of 25 banks increased to Rs 17,992.82 crore in
second quarter of 2008-09 from Rs 15,462.84 crore in the same period of FY’08
The average capital adequacy ratio (CAR) of 25 banks slipped to 12.68 per cent in Q2-FY ‘09
from 13.41 per cent in the previous year.
Karur Vysya Bank recorded maximum rise of 275.36 per cent in net NPAs in Q2-FY’09 with
Rs. 50.03 crore as against Rs 13.33 crore in Q2-07.
Seven major PSBs recorded a significant decrease in net NPAs.
Among the private sector banks only South Indian Bank registered an improvement in net
NPAs by -29.82 per cent.
16 banks witnessed a fall in their CAR from the previous fiscal, but they still managed to
remain above the prescribed limit of nine per cent posed by the Basel II accord.
Axis bank registered the maximum decline in CAR from 17.59 per cent in Q2 FY’08 to 12.2
per cent in Q2 FY’09.
Federal Bank had the maximum rise in CAR upto 20.81 per cent in Q2 FY 2008-09 from 13.08
per cent a year earlier.
The report prepared by the team of ASSOCHAM Research Bureau has taken
corporate results announced by Banks in second quarter ending September 2008.
Those banks have been taken that have announced their results from 20th-29th of
The report prepared is based on the data post