Slippage ratio

Loans that turned bad during the period, as a percentage of the opening standard loan book. It measures the flow of new problems rather than the stock.

With ₹1,050 crore of fresh slippages on an opening standard book of ₹40,000 crore, a bank has a slippage ratio of about 2.6%.

Slippages lead the gross bad-loan figure, because the reported stock is a net of new problems arriving and old ones being recovered or written off. Simply by writing off faster, a bank can report a falling gross number while slippages rise, and the two together tell you which is happening.

Read it against the special-mention buckets, which show accounts overdue by 30 to 90 days and therefore lead it by a quarter. A bank whose 61-to-90-day bucket is growing has told you what next quarter's slippages will be, and that disclosure is available before any asset-quality number moves.

Watch the flow. The stock is a lagging indicator with a good public relations department.