Macro-stress tests are conducted by the Reserve Bank of India to ascertain the resilience of banks against macroeconomic shocks. The results of this analysis presented in the Financial Stability Report-December 2014, suggest that under the baseline scenario, the GNPA ratio is expected to be around 4.0% of total advances as at the end of March 2016.
However, if the macroeconomic conditions deteriorate, the GNPA ratio may increase to 6.3% under severe stress scenario by March 2016. Drivers for deterioration in asset quality 5. Theoretically speaking, there could be various factors which may cause a good loan to turn into a problem loan.