NPAs rise, Jait­ley to meet bank bosses to re­view sce­nario

Financial Chronicle - - PLAN, POLICY -

FI­NANCE min­is­ter Arun Jait­ley will hold the an­nual NPA re­view meet­ings of the pub­lic sec­tor banks to­wards the end of this month, of­fi­cial sources said. It will be Jait­ley’s first ma­jor en­gage­ment with state lenders af­ter re­sum­ing of­fice af­ter a gap due to med­i­cal is­sues. He will re­view banks’ NPA sta­tuses, re­cov­er­ies through res­o­lu­tions, NCLTs and chal­lenges. He will also seek their in­puts on lend­ing short­com­ings and urge larger fo­cus on MSMEs.

The In­dian bank­ing sys­tem has been reel­ing un­der the weight of bad loans, with 26 banks to­gether – both pri­vate and pub­lic – re­port­ing gross NPAs of over Rs 7.31lakh crore, trans­lat­ing into an in­crease of about 50 per cent from the cor­re­spond­ing pe­riod last year.

PSBs col­lec­tively posted loss of Rs 16,600 crore in the June quar­ter and gross NPAs have ex­ceeded Rs 8.5 lakh crore, up 19 per cent yearon-year, while to­tal pro­vi­sion for NPAs jumped 28 per cent YoY to Rs 51,500 crore. Only two banks – Vi­jaya Bank and In­dian Bank – re­ported a net profit. The rest of PSBs had col­lec­tively posted a net loss of over Rs 87,000 crore.

But the trou­ble is in­creas­ing for PSBs, which alone added nearly Rs 1 lakh crore to the pool of bad as­sets over the De­cem­ber quar­ter and Rs 1.11 lakh crore dur­ing the March quar­ter, a Care Rat­ings re­port showed.

PSBs alone con­trib­uted to nearly Rs 6.16 lakh crore to the to­tal bad loan pile, which for the 26 banks rose by Rs 2.5 lakh crore over the cor­re­spond­ing pe­riod last year. The GNPA ra­tio for PSBs was at 13.41 per cent of the to­tal ad­vances. The bad loan ra­tio re­mained largely sta­ble for state-run lenders, in the range of 1112 per cent, in the first three quar­ters of FY18, but in­creased by 163 bps in the fourth quar­ter of FY189 to 13.41 per cent.

Of the 21 PSBs, 11 are un­der the Prompt Cor­rec­tive Ac­tion (PCA) watch of RBI for poor as­set qual­ity surge and huge NPAs. The gov­ern­ment re­cently in­fused Rs 11,336 crore in five state-owned banks, in­clud­ing scam-hit PNB to help th­ese lenders meet the reg­u­la­tory re­quire­ment.

Asked about the next round of capital in­fu­sion in banks, the source said it would de­pend on their per­for­mance.

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.