Arun Jaitley: PSBs’ NPAs soar Rs1 lakh cr in 9 months of FY16

To speed up recovery of bad loans, the government has approved establishment of 6 new Debt Recovery Tribunals, in addition to existing 33, he said.

By: ENS Economic Bureau | New Delhi | Published: March 9, 2016 1:49 am
public sector banks, arun jaitley, psb bad debt, psb bad loans, psb banks money relief, business news, india news, latest news At retreat of heads of public sector financial institutions. (PTI Photo)

Public sector banks’ (PSBs) bad loans increased by Rs 94,666 crore in first nine months of the current financial year, finance minister Arun Jaitley said on Tuesday. Gross non-performing assets (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. “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 informed Rajya Sabha in a written reply.

The government has taken specific measures to address issues in sectors such as infrastructure, steel and textiles where incidence of NPAs is high, Jaitley said in reply to another question. To speed up recovery of bad loans, the government has approved establishment of 6 new Debt Recovery Tribunals, in addition to existing 33, he said.

With regard to the loans which are written off, MoS 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 FY13 to 20.59 per cent during 2013-14 and further to 15.23 per cent during FY15.” The recovery rate has declined in recent years due to exponential growth of the NPAs, Sinha said. The banks have written off loans of 38 accounts worth Rs 8,033 crore during 2015-16, he said.

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On February 16, the Supreme Court took suo motu cognisance of a report in The Indian Express which disclosed that Rs 1.14 lakh crore of bad debts had been written off by state-owned banks between FY13 and FY15. Calling it “a big fraud”, a bench headed by Chief Justice TS Thakur ordered the RBI to share with it names of the biggest defaulters, who, the court said, lead “lavish lifestyle” despite not repaying the loans.

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 cases, additional prudential provisioning be made in a phased manner from April 1, 2016 to March 31, 2017, he said. Sinha 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 reply to another question in Rajya Sabha, Jaitley said Indian economy is projected to grow at 7.6 per cent in 2015-16, up from 7.2 per cent in 2014-15, indicating that economic growth has been improving in India. The government expects the economy grow at 7-7.75 per cent next year.

To a question on black money, Sinha said that the law enforcement agencies take appropriate action whenever cases of illegal remittances or blackmoney abroad are noticed, while stressing that the government has taken various effective measures to check the menace of black money. Sinha said some of such cases detected in the past indicate use of the medium of international trade for such transfers. There was no official assessment of black money stashed abroad, Jaitley said in a reply in Lok Sabha. Various NGOs and economists in the past have indicated widely varying estimates regarding illicit financial flows out of the nation. “Such estimations also appear to lack unanimity and reliability. The subject matter, therefore, does not appear amenable to reliable estimation,” Jaitley said.

Meanwhile, Sinha said the government has resolved 175 cases of tax disputes, involving amount of Rs 5,278.91 crore, with multi-national companies under the mutual agreement procedure (MAP) in 2015-16 so far.

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  1. Haradhan Mandal
    Mar 9, 2016 at 6:04 am
    'Rs1 lakh cr in 9 months of FY16'!!!! STILL the names (and all other details) are NOT to be published! What is more sinister for poor people of India and what is more DESHPREM for few others? Protect the Country also means Protect the wealth of poor and the country!?!? Are they two different things? (No CAG audit allowed in GAS production DATA in Godavari Basin and its pricing by a PVT company is another example). Finding silly mistakes in Kanhiya Kumar's speech can only score silly points in useless Punditry.
    1. Sundar BN
      Mar 9, 2016 at 9:20 am
      have the NPAs gone up because of more flaky loans or is it because more, "ets" - loans - are being declared non-productive ?
      1. Krishnaswamy Swamy
        Mar 9, 2016 at 4:26 am
        After the Vijay Mallya, we may very soon see Ambanis and Adanis also in the dock along with their political godfathers.
        1. Krishnaswamy Swamy
          Mar 9, 2016 at 1:49 am
          The present Narendra Modi led government at the Centre is forcing the Public Sector Bank Managers and Officers to involve in programmes like Jan Dhan Yojana, Pradhan Mantri Mudra Yojana, Pradhan Mantri Bima Yojana, etc to further the political publicity of the Prime Minister and his BJP government. This has led to the bank managers and officers not concentrating on service/ follow-up of bank loans and recovery of bad loans, deposit mobilisation, etc which are their prime duties. As the bank managers and officers are unable to devote their full time, attention and efforts to the prime banking duties as they are forcibly misused and abused to further the political publicity programmes of the Narendra Modi Government. That is the reason for the alarming increase of NPAs during last year, for which Narendra Modi and his BJP are mainly responsible. BJP government must keep off from abusing and misusing the public sector banks.
          1. S
            Mar 9, 2016 at 1:11 am
            why govt is not revealing the names of corrupt cmds/ed who have lent to unscrupulous/dishonest promotors the public money which has become npa/written off etc and the action taken against them.This is the need of the hour to stop such malpractices
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