State-run banks sitting on a pile of bad loans: Chidambaram
05 March 2014
Finance minister P Chidambaram has asked state-run banks to focus on the recovery of bad loans that have swelled to more than Rs2,36,000 crore at the end of September 2013 itself.
Chidambaram said the non-performing assets (NPAs) or bad loans of the public sector banks are expected to be higher this fiscal, which is a matter of great concern.
"The biggest challenge facing the public sector banks is NPAs and their asset qualities," Chidambaram said while addressing a media conference after reviewing the performance of public sector banks in Mumbai.
The combined NPAs of the public sector banks rose to Rs2,36,000 crore at the end of September 2013 from Rs1,83,000 crore at the end of March 2013 – a Rs53,000 crore increase during the 6-month period between 31 March and 30 September 2013.
Chidambaram said the banks have recovered bad loans worth Rs18,933 crore in April-December period of the current fiscal.
The country's top lender, State Bank of India (SBI) had reported gross NPAs of 4.75 per cent, or Rs 51,189 crore, and net NPAs of 2.10 per cent, or Rs21,956 crore, of total advances in 2012-13.
In the first nine months (April-to-December) of 2013-14, gross NPAs of the bank have climbed to 5.73 per cent (Rs67,799 crore) while net NPAs have swelled to 3.24 per cent (Rs37,167 crore).