Bad loans of public sector banks (PSBs) have increased by nearly Rs 1 lakh crore during the first nine months of the current fiscal, Finance Minister Arun Jaitley said today.
"The gross Non Performing Assets (NPAs) of the PSBs increased from 5.43 per cent as on March 2015 to 7.30 per cent as on December 2015," he told Rajya Sabha in a written reply.
Gross NPAs of PSBs increased from Rs 2,67,065 lakh crore in March 2015 to Rs 3,61,731 lakh crore in December 2015, he said.
Thus, there is an increase of Rs 94,666 crore over the nine months of the current fiscal 2015-16.
In reply to another question, Jaitley said the government has taken specific measures to address issues in sectors such as infrastructure, steel and textiles incidence of NPAs is high.
The government has also approved establishment of 6 new Debt Recovery Tribunals, to speed up recovery of bad loans of the banking sector, in addition to existing 33, he said.
RBI has also undertaken steps which include formation of Joint Lenders' Forum (JLF) for revitalising stressed assets in the system, flexible structuring for long term project loans to infrastructure and core industries and Strategic Debt Restructuring (SDR) scheme.
With regard to write offs, Minister of State for Finance Jayant Sinha said, "the percentage of amount recovered against the write-off done by PSBs has declined from 24.50 per cent in 2012-13 to 20.59 per cent during 2013-14 and further to 15.23 per cent during 2014-15."
In the recent years, Sinha said the rate of recovery (out of the written off amount) has declined due to exponential growth of the NPAs.
"The reasons for increase in NPAs include slowdown in recovery in the global economy and continuing uncertainty in the global markets leading to lower exports of various products like textiles, engineering goods, leather and gems etc, factors like volatility in prices of raw material and the shortage in availability of power to some sectors," he said.
The banks have written off loans of 38 accounts worth Rs 8,033 crore during 2015-16, he said.
In reply to another question, Sinha said an amount of Rs 1,30,156 crore as on December 2015, was classified as NPAs in PSBs for borrowers exceeding Rs 500 crore.
Banks were advised that in the case of failed Corporate Debt Restructured (CDR) cases, additional prudential provisioning be made in a phased manner from April 1, 2016 to March 31, 2017, he said in another reply.
Sinha further said that the ratio of top 30 NPAs to NPAs above Rs 1 crore (large borrowers) as on March 2015 for scheduled commercial banks is 51.79 per cent.
In a reply to another question, Sinha said the cumulative
net profit for the PSBs during the period of April 2015 to December 2015 was Rs 10,453 crore.
The provisioning for NPAs done by PSBs as on December 2015 is Rs 1,35,938 crore, he said.
He said that the loan policy of the banks does not discriminate amongst the borrowers.
Further, Sinha said, Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act 2002, protects a small borrower with the outstanding dues of Rs 1 lakh.
Replying to a separate question, the minister said as on date, one post of Managing Director and CEO from August 14, 2015 and nine newly created positions of non-executive chairman in PSBs are vacant.
"Process to fill-up these vacancies is underway," he said.
In a separate reply, he said, the RBI has informed that only two banks of Pakistan namely MCB Bank Ltd and United Bank Ltd have applied for banking presence in India.
