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Jaitley says bad loans piling up

August 4, 2014

UNION finance minister Arun Jaitley on Friday disclosed that non- performing assets ( NPAs), or bad loans, of public sector banks have soared to a staggering ` 2,5,809 crore for the financial year ended March 31.

Jaitley said that the bad loans, taken by big companies who defaulted on the payment, had mounted to ` 1,83,854 crore in 2012- 13 from ` 1,37,102 crore in 2011- 12. " NPAs have increased as the economy of the country has slowed down in the last two years," he said during the Question Hour in the Lok Sabha. The total gross NPA ratio has gone up to 4.03 per cent in 2013- 14 from 3.42 per cent in 2012- 13 and 2.94 per cent in 2011- 12, he added.

Jaitley said that many industries have suffered losses in the last two years leading to their inability to repay loans.

Besides, there are many people whose intentions are not good; they do not want to repay the loans, he said.

The minister said that the Reserve Bank of India ( RBI) has taken a number of steps to recover the bad loans that resulted in recovery of ` 33,486 crore in 2014, ` 19,832 crore in 2013 and ` 17,272 crore in 2012.

The RBI measures include creation of a Central Repository of Information on Large Credits to collect, store and disseminate credit data to banks on credit exposures of ` 5 crore and above, formation of joint lenders' forum, corrective action plan and sale of assets. RBI has issued instructions to the banks to review slippages in asset classification in the borrowal accounts with outstanding ` 5crore and above by the Board of directors of the bank and review NPA accounts which have registered recoveries of ` 1 crore and above.

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Source: Mail Today (India)

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