Pointing to the deteriorating asset quality of banks, gross non-performing assets of public sector banks (PSBs) crossed 5 per cent of gross advances by September this year with a sharp rise in bad loans in industries including gems and jewellery, coal and cement while over Rs 18.4 lakh crore worth of infrastructure projects remained stalled.
Finance ministry data reveals that bad loans of PSBs rose sharply to worrying Rs 2,43,043 crore or 5.32 per cent in September 2014, marking a 19.4 per cent rise over September 2013 when the gross NPA was 4.82 per cent. Gross NPAs of private banks too deteriorated to Rs 26,389 crore or 2.04 per cent per cent by September 2014 from 1.88 per cent in March this year. However, bad loans of private banks were largely at the same level a year ago at 2.06 per cent. The issue is understood to have been discussed at a meeting of finance minister Arun Jaitley with heads of PSBs on Thursday. “NPAs have risen … due to sluggishness in the domestic growth during the recent past, slowdown in recovery in the global economy and continuing uncertainty in the global markets,” said the agenda papers circulated for the meeting.
Sources said banks have been asked to go ahead with recovery efforts and pursue wilful defaulters strictly.
Fourteen of the public sector banks including State Bank of India, Punjab and Sind Bank and United Bank of India had gross NPAs over 5 per cent while 12 state run lenders including Bank of India, Corporation Bank and Bank of Baroda had gross NPAs between 3 per cent to 5 per cent. The data reveals that seven industries including gems and jewellery, coal and cement registered a sharp jump in bad loans of public sector banks while sectors aviation and iron and steel saw a decline in bad loans.
Sectorally, bad loans in small and medium industries saw a sharp jump at 7.18 per cent in September 2014.
Adding to the stressed assets with banks, 371 infrastructure projects are pending with the Project Monitoring Group in the Cabinet Secretariat for resolution of various clearances and approvals.