Press Esc to close
Monday 26 September 2016
News updated at 2:47 AM IST
Weather
Max: 25.8°C
Min : 19.6°C
In Bengaluru
Generally cloudy

More measures to rein in NPAs on the anvil: Subbarao

Chennai, August 1, 2013, PTI

PSBs at 3.8% of gross NPAs end-March

D Subbarao

Concerned over rising bad loans, the Reserve Bank on Thursday said it will take more measures to check non-performing assets (NPAs) of the public sector banks.

"We are going to put in more measures to see that NPA level is controlled across the asset quality of banks. It is is very very important for credit to continue to go to productive sectors," RBI Governor D Subbarao said while delivering the 5th R Venkataraman Endowment Lecture here.

RBI, in the past, has taken some steps in this regard including increase in provisioning norms and tightening norms for restructuring.

Subbarao noted that public sector banks have high NPAs than private sector banks.
"It is true that NPAs in public sector banks is higher because their decision variables are different, and therefore, NPAs are higher than private sector banks," he said.
"In the Reserve Bank, we are concerned about it. It is a growing concern. Even last Tuesday, when we met at the bank, we spoke about this," he added.

Gross NPAs of the public sector banks (PSBs) were the highest and stood at 3.8 per cent of the system at the end of the March quarter, followed by foreign lenders.
However, the old private sector banks recorded the highest recovery during the period, at 21.2 per cent, followed by PSBs at 9.1 per cent.

Financial Stability Report (FSR) released by RBI blamed seasonality factors for the higher slippages in the March quarter, which traditionally sees higher bad loans.
The report said the loan recast too declined in the March period to 5.7 per cent from 5.9 per cent in the September quarter.

Asked about high cost of agriculture loan in the country, Subbarao said "the answer is that the cost of credit is determined by the riskiness. And banks attach risk to agricultural loan perhaps and therefore, the cost is high."

“As an economy, as public policy makers,” he said, "we are also concerned about credit offered at reasonable rates to economically productive activities like agriculture, education loans and small and medium enterprises."

"There are several ways of doing it. The government for example, is now giving subvention on agricultural credit," he added.


Go to Top

Photo Gallery
Prime Minister Narendra Modi during BJP's National Council Meeting at Kozhikode...

Prime Minister Narendra Modi during BJP's National Council Meeting at Kozhikode...

Cyclists take part Cyclothon 2016 held on world car free day in Gurgaon...

Cyclists take part Cyclothon 2016 held on world car free day in Gurgaon...

Artists practice Garba in Ahmedabad...

Artists practice Garba in Ahmedabad...

School students at 'Mother Walk' rally to commemorate the canonization of Mother Teresa in Kolkata

School students at 'Mother Walk' rally to commemorate the canonization of Mother Teresa in Kolkata

Maratha community members hold a protest rally demanding justice for Kopardi rape victim...

Maratha community members hold a protest rally demanding justice for Kopardi rape victim...

An aerial view of the flood hit Edupalaya village in Medak district of Telangana...

An aerial view of the flood hit Edupalaya village in Medak district of Telangana...

Indian and U.S. army soldiers take part in an Indo-US army joint combat exercise in Ranikhet...

Indian and U.S. army soldiers take part in an Indo-US army joint combat exercise in Ranikhet...

St Patrick Church celebrating 175th anniversary in Museum Road, Bengaluru...

St Patrick Church celebrating 175th anniversary in Museum Road, Bengaluru...

Army personnel arrive to help flood affected people in Hyderabad...

Army personnel arrive to help flood affected people in Hyderabad...

Prime Minister Narendra Modi with BJP President Amit Shah wave to the crowd at public rally...

Prime Minister Narendra Modi with BJP President Amit Shah wave to the crowd at public rally...

Copyright 2014, The Printers (Mysore) Private Ltd., 75, M.G Road, Post Box 5331, Bengaluru - 560001
Tel: +91 (80) 25880000 Fax No. +91 (80) 25880523