Stressed assets of banks may touch Rs 10 lakh crore in the fourth quarter of 2015-16 amid slowdown in sectors like steel and ongoing asset quality review by the RBI, a report said.
At the end of December, the total stressed assets (Gross NPAs plus restructured assets) of all the banks were at Rs 8 lakh crore, which is expected to see a significant jump, according to a report by industry body Assocham.
"The slowdown in certain important sectors like steel, textiles and aluminium, and the ongoing Asset Quality Review (AQR) may push stressed assets of the banks to Rs 10 lakh crore mark in the fourth quarter of 2015-16," the report said.
An asset quality review undertaken by the Reserve Bank last December has resulted in a spike in bad assets with lenders recognising over Rs 1 lakh crore of bad assets in the December quarter alone.
While releasing the report here, an Assocham spokesman said, "Gross NPAs of state-run banks increased from Rs 2,67,065 lakh crore in March 2015 to Rs 3,61,731 lakh crore in December 2015. In contrast, the private sector banks' Gross NPAs rose to Rs 39,859 crore at the end of December from Rs 31,576 crore at the end of March 2015."
The report said mounting bad loans have eroded the profitability of all banks, with 11 public sector lenders reporting losses of Rs 12,867 crore in the third quarter of last fiscal.
