Banks' NPAs hold steady despite war shake-up, shows Crisil stress test
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Indian banks' asset quality is expected to remain stable despite the ongoing West Asia war, with gross non-performing assets (NPAs) projected to stay between 2.0-2.2% by March 2027. The corporate segment is likely to remain resilient, while the MSME segment may face higher pressure due to limited financial muscle.
Indian banks' asset quality is expected to remain stable despite the West Asia war. Crisil Ratings' stress test across 30 sectors showed limited impact on corporate credit profiles. Gross NPAs are projected to stay between 2.0-2.2% by March 2027, similar to the historical low of 2.0% as of March 2026. The corporate segment, accounting for 36% of India's total bank credit, is expected to see stable gross NPAs of 1.2-1.3% by March 2027. MSMEs, however, may face higher pressure due to limited financial muscle. Government relief measures are expected to support MSMEs and banks' asset quality.
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