Positive impactSector
Small finance banks' asset quality to improve, GNPA to drop by 120 basis points by March 2027: Crisil
Economic Times 7 hrs ago·2 Sept 2026, 8:08 pm
Crisil has projected a significant improvement in the asset quality of small finance banks over the next three years. The rating agency forecasts that Gross Non-Performing Assets (GNPA) will decline by 120 basis points by March 2027. This positive outlook is driven by a stronger recovery in the microfinance segment and steady growth in other loan categories. Additionally, banks are expected to maintain stricter underwriting standards, which will help in better borrower selection and reduce future credit risks.
For investors, this news suggests a more stable operating environment for small finance banks. A drop in GNPA indicates healthier balance sheets and potentially lower provisioning costs, which can boost profitability. The combination of recovering microfinance portfolios and disciplined lending practices points toward a resilient sector. Investors should monitor the actual recovery rates and the banks' ability to sustain these improvements in the coming quarters.
Excerpt from Economic Times
Small finance banks' asset quality to improve, GNPA to drop by 120 basis points by March 2027: Crisil Small finance banks' asset quality to improve, GNPA to drop by 120 basis points by March 2027: Crisil Small finance banks anticipate improved asset quality this financial year. Gross non-performing assets are…Read the original at Economic Times
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