Positive impactSector
Small Finance Banks’ GNPAs seen falling 120 bps to 2.6-2.8% by March 2027: Crisil
Economic Times 2 hrs ago·2 Sept 2026, 10:01 am
Small Finance Banks (SFBs) are expected to see a significant improvement in their financial health over the next few years. According to a recent report by Crisil Ratings, the sector's Gross Non-Performing Assets (GNPAs) are projected to fall by 120 basis points to a range of 2.6-2.8% by March 2027. This decline is a notable drop from the 3.8% recorded in March 2026, signaling a strengthening in asset quality.
This positive outlook is primarily driven by a recovery in the microfinance segment, which has historically been a key revenue source for these banks. Additionally, the continued growth in non-microfinance lending is expected to contribute to this trend. For investors, this suggests that the sector is moving towards a more stable and sustainable growth phase, with reduced risks associated with bad loans.
Looking ahead, investors should monitor the actual recovery rates in the microfinance portfolio and the pace of growth in other lending segments. The ability of these banks to manage their asset quality while expanding their loan books will be crucial in determining their long-term performance and the realization of these projected improvements.
Excerpt from Economic Times
Published On Sep 2, 2026 at 03:31 PM IST Small finance banks (SFBs) are expected to see their gross non-performing assets (GNPAs) decline by around 120 basis points to 2.6 - 2.8 per cent by March 2027, as credit performance in the microfinance portfolio improves and non-microfinance assets continue to grow, Crisil…Read the original at Economic Times
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