Bank loan defaults: Will the situation worsen?

Bad loans for public sector banks have grown at a record pace over the second quarter. SBI's gross NPAs jumped 22%, while Union Bank's loan defaults rose 37%; and that of Bank of India shot up by over 16%. CNBC-TV18's Gopika Gopakumar gives a lowdown.

Restructured accounts have also gone up for some PSU banks. Punjab National Bank has restructured Rs 4,000 crore of loans in the second quarter itself, against Rs 563 crore in the first quarter. Similarly, Union Bank restructured loans worth Rs 756 crore versus Rs 228 crore in the first quarter. But some banks like Bank of Baroda have seen gross NPLs fall from 1.46% to 1.41% of total assets. And that has some bankers believing hoping things will reverse. Pratip Chaudhuri, Chairman, SBI, said,