House panel to take stock of rising NPAshttps://indianexpress.com/article/business/business-others/house-panel-to-take-stock-of-rising-npas/

House panel to take stock of rising NPAs

According to RBI data, net NPA of the 26 public sector banks rose to 2.02 per cent during 2012-13 as compared to 1.53 in the previous fiscal.

With the banking sector continuing to struggle with rising bad loans, the Parliamentary Standing Committee on Finance is set to meet later this week to discuss the situation with the finance ministry.

“The meeting is scheduled for January 16 to discuss the issue of gross non-performing assets of banks,” said a person close to the development.
The committee, which is headed by former finance minister and BJP leader Yashwant Sinha, is expected to review the situation and seek reasons behind the jump in bad loans of public sector banks.

As on September 30, 2013, gross non performing assets of banks stood at Rs 2,29,007 crore.
Gross non-performing assets (NPAs) of state- owned lenders stood at Rs 1.92 lakh crore by June 2013 or 3.99 per cent of gross advances, compared to Rs 1.64 lakh crore in March 2013.
Recently, the Reserve Bank of India too had recently highlighted the rising stress from bad loans in the banking sector and warned that failure of even one corporate group could wipe out 60 per cent of the banking system’s capital.
According to RBI data, net NPA of the 26 public sector banks rose to 2.02 per cent during 2012-13 as compared to 1.53 in the previous fiscal.
Net NPA of new private sector banks rose marginally to 0.45 per cent as compared to 0.42.

The finance ministry too has prodded banks to recover bad loans and deal strictly with defaulters.
While pointing out that bad loans are a function of the economy, finance minister P Chidambaram has however directed all state owned lenders to ensure that their write-offs are not greater than their recovery and also to focus on top 30 defaulters.

Surbhi