Pranab asks banks to reduce NPAs
Finance Minister Pranab Mukherjee today asked banks to bring down their non-performing assets (NPAs) for sound financial health of the Indian banking system.
June 12, 2012 / 22:23 IST
Finance Minister Pranab Mukherjee today asked banks to bring down their non-performing assets (NPAs) for sound financial health of the Indian banking system.
Due to record recovery against prudential write-off in the January-March quarter of 2011-12, public sector banks managed to reduce their NPAs to 3.1% from 3.18% in the previous quarter."I am happy that banks have taken up the challenge to reduce NPA's...This momentum now has to be kept up and timely action in this direction would ensure sound financial health of the banking sector," he said in his address to the CEOs of public sector banks and financial institutions here.The Finance Minister expressed happiness as the banks were "very proactively" responding to the problems so that NPAs are avoided.He said recent decisions on restructuring of loans in the textile sector and discoms of the power sector are good examples of NPA management."I urge you to deploy various tools at your command for containing and rolling back NPAs in accordance with the guidelines of the Reserve Bank of India," he added. About Rs 1.30 lakh crore loan of different banks to power distribution companies (discoms) and Rs 35,000 crore to the textiles sector are under stress and process is underway to restructure these loans so that these segments could get fresh loans.Deposits of public sector banks (PSBs) grew by 14.4% to over Rs 50 lakh crore in 2011-12 year-on-year, while advances increased by 17.7% to over Rs 40 lakh crore. Net profits of PSBs have gone up from Rs 44,900 crore to over Rs 49,500 crore in 2011-12 despite a difficult economic scenario, Mukherjee informed.He said banks have been an agriculture credit target of Rs 5.75 lakh crore for the current fiscal. In 2011-12, agriculture credit exceeded Rs 5 lakh crore. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
