The finance ministry has called a meeting of senior officials of the public sector banks on Monday to take stock of recovery of non-performing assets (NPAs) and to deliberate upon ways to deal with big loan defaults. The Department of Financial Services is scheduled to meet with bank officials dealing with bad loan recoveries at PSBs, sources 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 FY14 and further to 15.23 per cent during FY15, as per the finance ministry data. Sources said the finance ministry and bankers meeting will focus on big loan default and NPA cases.
An amount of Rs 1,30,156 crore as on December 2015, was classified as NPAs in PSBs for borrowers exceeding Rs 500 crore, according to the finance ministry data. The ratio of top 30 NPAs to NPAs above Rs 1 crore as on March 2015 for scheduled commercial banks is 51.79 per cent, the data shows.
The gross NPAs of the PSBs increased from 5.43 per cent as on March 2015 to 7.30 per cent as on December 2015. Banks profitability has taken a hit due to bad loans. The banks have written off loans of 38 accounts worth Rs 8,033 crore during 2015-16. Amid outrage over embattled Vijay Mallya’s alleged massive loan default, Jaitley and RBI Governor Raghuram Rajan had cautioned against going on a “fishing expedition” on bad loans. However, Jaitley made it clear that individual misdemeanors will be “looked into differently”.
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 PSBs between FY13 and FY15. Calling it “a big fraud”, a bench headed by Chief Justice T S Thakur ordered the RBI to share with it names of the biggest defaulters.