Rating agency, Crisil said that the Indian banks may see a fall in their asset quality. This will, it said, be followed by an increase in the collective gross non-performing assets (NPAs) of the banks.

In its latest research report published, it said that the NPA ratio is expected to increase to 3.6 per cent during 2010-11. This will be higher than 2.3 per cent that they had in 2008-09.

The report also said that the restructured assets are going to be the ones that will turn into NPAs. The higher a banks has these kinds of assets the higher the chances that it will be seeing NPAs.

The banks have seen an increase in the number of restructured assets after the Reserve Bank of India (RBI) allowed them to change some of their standard assets. This approval was given by RBI during the economic slowdown and was done with the aim of helping smaller companies to stay afloat.

As per the report, the total value of the restructured assets of the banks stood at Rs. 76,500 crore. This means that 3.4 per cent of the total advances of the banks form this part. Earlier it was 2.5 per cent.