RBI governor to appraise PAC on bad loans on 6 Nov

RBI Governor Raghuram Rajan will appraise parliament's Public Accounts Committee (PAC) on the issue of rising non-performing assets of banks at a briefing on 6 November.

Rajan will make a presentation on rising non-performing assets of banks and answer members' queries.

The PAC hearing comes at a time when NPAs of state-run banks are estimated to have reached Rs2,60,000 crore mark.

According to All India Bank Employees' Association (AIBEA), the top 50 loan defaulters, mainly corporates, have defaults of around Rs40,528 crore (Rs405.63 billion).

Management consultancy firm Ernst & young estimates bad loans in the books of Indian banks at around Rs2,60,000 crore with the top 30 defaulters alone accounting for close to Rs95,000 crore.

This is over and above those loans that are restructured. Stressed loans, which are a combination of bad loans and restructured loans, now account for over 11.1 per cent of all bank advances.

However, banks and the Reserve Bank differ on what constitutes bad loan. IBA, meanwhile, demanded a remedy for the bad loans at the earliest to safeguard the public money in the banks.

Banks told the RBI that its definition of bad loans is skewing the picture against their financial soundness, while the RBI said lenders should aim to recover some of the loans where borrowers have defaulted

The list, released by the association, is on the data on loan not paid from Public Sector Banks except State Bank of India, IDBI and foreign banks. The association also plans to come out with top 30 defaulters in each Bank.

The biggest defaulter according to the list is Kingfisher Airlines.