)
Hoping that the NPA situation will improve in the coming quarters, Finance Minister Arun Jaitley today said all efforts were being made to correct the "unacceptable" level of bad loans in PSU banks.
"NPAs at the present level are unacceptable. They reached this level partly because of indiscretion, partly because of inaction, partly because of challenges in some sectors of the economy, which were evident through the high NPA in these sectors," he said.
Jaitley was inaugurating 109 new branches and 109 Bunch Note Acceptors (BNA) on the Indian Bank Foundation Day.
Gross Non Performing Assets (NPAs) of public sector unit (PSU) banks at the end of March quarter stood at 5.20% compared with 5.63% in December.
"An all-out effort has been launched to bring NPAs down. The effort by the bank administration, the effort by the government to infuse more capital, the effort to get more finance by divesting (government holding), and then greater discretion and more importantly addressing the concerns of each of (stressed) sectors.
"And I don't have a doubt that over the next few quarters, banks will be able to address these challenges," he said.
The Finance Minister said the government's plan to infuse capital into the PSU banks over the next four years will "infuse lot of financial strength" in these banks to deal with the bad loan problems.
As per global agency Moody's, Indian banks will continue to reel under the impact of bad loans in the current financial year, although new NPAs may decline.
RBI has predicted that gross NPAs in the banking system are likely to increase to 4.8 per cent by next month, from 4.6 per cent per cent in March. For the public sector banks alone, the gross NPAs stood at 5.2 per cent as on March 31.
Out of Rs 1.80 lakh crore capital requirement estimated by the Finance Ministry for state-run banks, the government would be providing Rs 70,000 crore -- Rs 25,000 crore each in the current and the next fiscal, and Rs 10,000 crore each in 2017-18 and 2018-19.
Jaitley further said the new system to hire best talent, including from the private sector, for top posts will go a long way in improving the performance of state-run banks, which are "lifeline of the economy".
As per global agency Moody's, Indian banks will continue to reel under the impact of bad loans in the current financial year, although new NPAs may decline.
RBI has predicted that gross NPAs in the banking system are likely to increase to 4.8 per cent by next month, from 4.6 per cent per cent in March. For the public sector banks alone, the gross NPAs stood at 5.2 per cent as on March 31.
Out of Rs 1.80 lakh crore capital requirement estimated by the Finance Ministry for state-run banks, the government would be providing Rs 70,000 crore -- Rs 25,000 crore each in the current and the next fiscal, and Rs 10,000 crore each in 2017-18 and 2018-19.
Jaitley further said the new system to hire best talent, including from the private sector, for top posts will go a long way in improving the performance of state-run banks, which are "lifeline of the economy".
