GOVERNMENT OF INDIA
Ministry of Finance
DEPARTMENT OF FINANCIAL SERVICES

RAJYA SABHA
UNSTARRED QUESTION NO. 2062
TO BE ANSWERED ON THE AUGUST 30, 2012 / BHADRAPADA 8, 1934 (SAKA)
Increase in NPAs of PSU Banks

2062. SHRI RAJEEV CHANDRASEKHAR:

Will the Minister of FINANCE be pleased to state:

(a)   whether it is fact that the gross Non-Performing Assets (NPAs) of PSU banks have increased significantly in the last several months;

(b)   if so, the details thereof for the last two years, year-wise, bank wise;

(c)    whether it a fact that the NPAs in private sector banks are far lower than those in PSU banks;

(d)   if so, the reasons for this sharp difference in NPAs between private sector and public sector banks; and

(e)   the corrective measures that Government proposes to take in this regard?

ANSWER
THE MINISTER OF STATE IN THE MINISTRY OF FINANCE
(SHRI NAMO NARAIN MEENA)

(a) & (b): The Gross Non-Performing Assets (GNPAs) of Public Sector Banks (PSBs) as on March 2012 were Rs. 1,12,489 crore which amounts to 3.17% of Gross Advances and as on June 2012, they stand at Rs.1,23,462 crore which amounts to 3.48% of Gross Advances. The details of GNP As and ratio of GNP As to Gross Advances of PSBs for the last two years, bank-wise, are annexed.

(c) & (d): The ratio of GNPAs to Gross Advances in Private Sector Banks as on June 2012 was 2.12% as against 3.48% in respect of PSBs. This ratio in PSBs in March 2011 was 2.32%.

The increase in NPAs in PSBs is due to switching over to system based recognition of NPAs.

(e): Banks are required to monitor their NPAs and take steps to bring them down through recovery/other channels. Reserve Bank of India also monitors the NPA levels in banks. This aspect is reviewed during Annual Financial Inspections of banks and monitored on an ongoing basis through regulatory returns submitted by banks and periodical meetings with banks. The channels of recovery available to banks include recourse to Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, Debt Recovery Tribunals, Lok Adalats etc.

The Government has advised PSBs to take a number of new initiatives to increase the pace of recovery and manage NPAs, which include appointment of Nodal officers for recovery, to conduct special drives for recovery of loss assets, to put in place early warning system, to replace system of post dated cheques with Electronic Clearance System (ECS) and to proactively pursue the loan issues with State Governments.

Annexure