Modi calls top FinMin officials to discuss on PSB's distress

Modi calls top FinMin officials to discuss on PSB's distress

With non-performing assets (NPAs) of PSU banks rising manifold due to loan default and frauds, Prime Minister Narendra Modi has called a meeting of top finance ministry officials on May 14, a little ahead of his government completing one year in office, to chalk out steps to get rid of the persistent problem.

Public sector banks and the Reserve Bank of India have taken several steps for better recovery of loans from various sectors. Banks have also been instructed to have a Board approval loan recovery policy and take recourse to legal mechanisms like SARFAESI Act, Debt Recovery Tribunals and Lok Adalats for debt recovery. Despite the measures, the gross NPAs or GNPAs of PSU banks have gone up to 4.5 per cent of their total advances as in March this year.

“The PM wants the PSU banks to perform well. The deliberations will centre around that,” according to an official. According to the RBI data, stressed assets ratio of such banks, which is GNPA plus restructured standard advances for the system, stood at 10.9 per cent, as at the end of March, 2015 as compared to 10 per cent in March, 2014 and 10.7 per cent in September 2014.

The top 30 defaulters are sitting on bad loans of Rs 95,122 crore, which is more than one-third of the entire non-performing assets of public sector banks as on December 2014. In terms of percentage, it amounts to 36.5 per cent.

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