Skip to main content

Gross NPAs of listed banks swell to Rs 5.8 lakh crore

By
The gross non-performing assets (NPAs) of listed banks jumped to Rs 5.81 lakh crore in March from around Rs 3 lakh crore a year ago. Corporate loans dominated the bad loan accounts in FY16, according to data from Capitaline compiled by Business Standard's research bureau.
Analysts and bank executives said the asset quality review (AQR) by the Reserve Bank of India (RBI) across banks in 2015-16 helped get a realistic assessment of stress in the system. This led to a sharp rise in provisions for NPAs, denting bottom line at a time when interest income remained subdued.
Now, banks face the challenge of net NPAs, for which provisions are yet to be made. Vibha Batra, head of financial sector ratings at ICRA, said banks might not see repeat of large-scale slippages like last year. They, however, have a daunting task of making provisions for bad loans in the coming quarters. There is also the risk the agriculture sector showing stress in 2017. Farming activity has been hit due to bad monsoon in the past two years.
According to State Bank of India chairman Arundhati Bhattacharya, the entire impact of AQR they have taken into account. In the third quarter of FY16, there have been slippages of Rs 21,000 crore. Of this, the share of AQR was Rs 14,000 crore. In the fourth quarter, there were slippages of Rs 30,000 crore, with AQR accounting for Rs 9,000 crore.
"As much as Rs 20,000 crore worth of slippages have come from large corporate accounts. This is because several large accounts were not on our AQR list but on other banks AQRs," Bhattacharya said.
Gross NPAs of listed banks swell to Rs 5.8 lakh crore Elaborating on the AQR exercise, S S Mundra, deputy governor of RBI, had said last month that the signs of rising stress in the banking system became increasingly evident in the years beginning 2012.
The stressed assets comprising gross NPAs, restructured standard assets and written-off accounts for the banking system as a whole grew substantially. Stressed assets, 9.8 per cent of the total at the end of March 2012 moved up sharply to 14.5 per cent by December 2015. During the same period, the stressed assets for public-sector banks swelled from 11 per cent to 17.7 per cent. Global economy is passing through a difficult phase and vulnerabilities remain. So, in a globally integrated economy, a general decline in the asset quality was not totally unexpected, Mundra had said.
Business Standard New Delhi, 28th May 2016

Comments

Post a Comment

Popular posts from this blog

Household debt up, but India still lags emerging-market economies: RBI

By
  Although household debt in India is rising, driven by increased borrowing from the financial sector, it remains lower than in other emerging-market economies (EMEs), the Reserve Bank of India (RBI) said in its Financial Stability Report. It added that non-housing retail loans, largely taken for consumption, accounted for 55 per cent of total household debt.As of December 2024, India’s household debt-to-gross domestic product ratio stood at 41.9 per cent. “...Non-housing retail loans, which are mostly used for consumption purposes, formed 54.9 per cent of total household debt as of March 2025 and 25.7 per cent of disposable income as of March 2024. Moreover, the share of these loans has been growing consistently over the years, and their growth has outpaced that of both housing loans and agriculture and business loans,” the RBI said in its report.Housing loans, by contrast, made up 29 per cent of household debt, and their growth has remained steady. However, disaggregated data sho...
Post a Comment
Read more

External spillovers likely to hit India's financial system: RBI report

By
  While India’s growth remains insulated from global headwinds mainly due to buoyant domestic demand, the domestic financial system could, however, be impacted by external spillovers, the Reserve Bank of India (RBI) said in its half yearly Financial Stability Report published on Monday.Furthermore, the rising global trade disputes and intensifying geopolitical hostilities could negatively impact the domestic growth outlook and reduce the demand for bank credit, which has decelerated sharply. “Moreover, it could also lead to increased risk aversion among investors and further corrections in domestic equity markets, which despite the recent correction, remain at the high end of their historical range,” the report said.It noted that there is some build-up of stress, primarily in financial markets, on account of global spillovers, which is reflected in the marginal rise in the financial system stress indicator, an indicator of the stress level in the financial system, compared to its p...
Post a Comment
Read more

Retail inflation cools to a six-year low of 2.82% in May on moderating food prices

By
  New Delhi: Retail inflation in India cooled to its lowest level in over six years in May, helped by a sharp moderation in food prices, according to provisional government data released Thursday.Consumer Price Index (CPI)-based inflation eased to 2.82% year-on-year, down from 3.16% in April and 4.8% in May last year, data from the Ministry of Statistics and Programme Implementation (MoSPI) showed. This marks the fourth consecutive month of sub-4% inflation, the longest such streak in at least five years.The data comes just days after the Reserve Bank of India’s (RBI) Monetary Policy Committee cut the repo rate by 50 basis points to 5.5%, its third straight cut and a cumulative reduction of 100 basis points since the easing cycle began in February. The move signals a possible pivot from inflation control to supporting growth.Food inflation came in at just 0.99% in May, down from 1.78% in April and a sharp decline from 8.69% a year ago.A Mint poll of 15 economists had projected CPI ...
Post a Comment
Read more