New Delhi. After Moody’s , Fitch also forecasts to reform in Indian banking sector. According to Fitch, the banking sector will remain slow recovery rate of NPAs in the financial year 2015-16 . According to the agency , the rate of NPA is 10.9 per cent as compare to last year which was 11.1 per cent. Fitch believes that due to economic recovery the non-performing loan ( NPL ) growth rate will be undermined.
As compared to last year financial year in 2014-15, NPL ratio of Indian banks were went to 110 basis points. Where reporting ratio of government banks was 13.5 per cent and the private banks was 4.6 percent .
Moody’s also improve ratings
Fitch ‘s this statement from Moody’s Investors Service came just after a day to increase rating from negative to stable in Indian banking sector. Moody’s also give reference to slow improvement in the banking sector , it was reformed in the rating.
Government banks have more difficulties
According to Fitch , Due to micro- economic recovery, slight improvement have been done in non- performing loan but the due to pace of improvement is weaker than expected, recovery may take a long time. According to Fitch , the recovery in banks may take more time, because their NPA is too high.
In September, estimate growth rate was reduced
Earlier in September, Fitch estimated the growth of Indian economy by 7.8 to 7.5 per cent for the current fiscal year. Not only this, the rating agency also declined a growth rate from 8.1 per cent to 8 per cent for the financial year 2016-17. Fitch had estimated it, due to slow pace of economic reforms and investment environment.
Next financial year will also have Slow Improvements
According to Fitch, It take longer time in recovery of bank’s NPA and it takes more than expected time. Public sector banks, around 60 per cent recovery of NPAs is doubtful. Fitch thought banking sector will remain slow recovery in the next financial year