Bad loans of the state-owned banks are likely to go up further to 10.1 percent by the end of the current fiscal, Minister of State for Finance Santosh Kumar Gangwar said while quoting an RBI report.
In a written reply to Rajya Sabha, the Minister said the RBI’s Financial Stability Report had said that “under the baseline scenario, the GNPA (Gross Non-Performing Assets) ratio for public sector banks may go up to 10.1 percent by March 2017”.
He attributed the rise in bad loans to a host of factors like domestic growth sluggishness in the recent past, slowdown in recovery in global economy and continuing uncertainty in global markets, leading to lower exports of various products like textiles, engineering goods, leather and gems.
The other factors responsible for the rise in NPAs include ban on mining projects, delay in clearances affecting power, iron and steel sector, volatility in prices of raw material, shortage in availability of power and also aggressive lending by banks in the past.
GNPA jumped from 5.43 percent (Rs 2.67 lakh crore) in 2014-15 to 9.32 percent (Rs 4.76 lakh crore) in 2015-16, Gangwar said in a reply to another question.
Gangwar further elaborated that there were 701 NPA accounts above Rs 100 crore amounting to Rs 1.64 lakh crore in public sector banks as on December 2015.
The Reserve Bank, he added, has also submitted a list of defaulters of above Rs 500 crore to the Supreme Court in a sealed cover.
The minister, in yet another reply, said there were 8,167 wilful defaulters with NPAs of Rs 25 lakh and above. They collectively owed Rs 76,685 crore to the banks.
The banks, he said, filed FIRs in 1,724 cases and recovered Rs 3,498 crore from 1,650 such defaulters in 2015-16.
The minister said that both the government and the RBI have taken a number of measures to deal with the problem of mounting bad loans. These include addressing the issues in sectors like power, steel and textiles; establishment of new Debt recovery Tribunals (DRTs); formation of Joint Lenders’ Forum and introduction of the Strategic Debt Restructuring (SDR) scheme.