Home / Industry / Banking /  Banks’ total NPAs increase to Rs3,00,611 crore

New Delhi: The non-performing assets (NPAs) of banks in the country stood at 3,00,611 crore as on December 2014, the government told Lok Sabha on Friday, attributing the increase of non-performing assets (NPAs) to sluggishness in growth.

Of the total NPAs, 2,62,402 crore belonged to nationalized banks and 38,209 crore belonged to private sector banks, minister of state for finance Jayant Sinha said during Question Hour. He said the total gross advances of nationalised banks as on December 2014 stood at 46,49,843 crore while the total advances of private sector banks stood at 16,77,875 crore.

The minister cited stalled projects, sluggishness in the domestic growth in the last few years and slowdown in the global economy as the key reasons for the increase of NPAs. In case where staff connivance is noticed along with the borrower, banks take action as per the Reserve Bank of India (RBI) circular on frauds.

“As per the master circular, banks conduct enquiry to fix up staff accountability and impose minor or major penalties depending on merit of each case... In the period from April 2011-December 2014, as per the information provided by 20 major PSU (public sector undertaking) banks, after conducting enquiries into the staff lapses in NPA cases, 470 employees were dismissed and major and minor penalties were imposed on 5177 and 5811 employees respectively," he said. Sinha said the RBI has taken a number of steps for recovery of NPAs that include having a Board approved loan recovery policy, putting in place an effective mechanism for information sharing for the sanction of loans and taking recourse to legal mechanism.

The RBI has released guidelines on 30 January 2014 for the ‘Early Recognition of Financial Distress, Prompt Steps for Resolution and Fair Recovery for Lenders: Framework for Revitalising Distress Assets in the Economy’, suggesting various steps for quicker recognition and resolution of stressed assets.

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