Mumbai, April 17 -- Banks' asset quality is unlikely to take a significant hit from disruptions caused by the ongoing West Asia war, with bad loans expected to remain broadly stable, Crisil Ratings said on Friday. The agency, which factored in the conflict and its after-effects persisting for three to four months, said a stress test across 30 sectors showed limited impact on most corporate credit profiles, even as pressure is expected to be higher in micro, small and medium enterprises.

"Banks are expected to keep their gross non-performing assets (NPAs) in check at 2.0-2.2% by the end of March 2027, compared with a historical low of an estimated ~2.0% as of March 2026," Crisil said.

While the ratings agency believes that corporates' he...