PSU banks’ NPAs fall Rs 1L cr in FY21

 

Mumbai: Non-performing assets (NPAs) of public sector banks fell by over Rs 1 lakh crore during the first nine months of the current fiscal to Rs 5,77,137 crore from Rs 6,78,317 crore. Responding to a Parliament query, the government said that the reduction was due to its strategy of “recognition, resolution, recapitalisation and reforms”.

The government said that its policy of transparent recognition of NPAs resulted in bad loans rising to a high of Rs 8,95,601 crore in FY18 from Rs 2,79,016 crore in FY15. According to the data, UCO Bank has seen the sharpest reduction of 40.7% in its NPA numbers in December 2020 from March 2020. This was followed by Bank of Maharashtra (33.6%), State Bank of India (21.4%) and Canara Bank (18.6%).

In its response, the government said that until September 2020, the Insolvency and Bankruptcy Code had led to the approval of 277 resolution plans with Rs 1.9 lakh crore of the realisable amount by financial creditors. It said that the government has infused Rs 3.2 lakh crore in public sector banks in the last six years, with the banks themselves raising Rs 2.8 lakh crore through equity and bonds. Banks also raised an additional Rs 36,226 crore by selling non-core assets.

On the projection in the Reserve Bank of India’s financial stability report that bank NPAs could rise to 13.5% by September 2021, the finance ministry said that according to the central bank, the numbers do not factor in the policy measures. These include RBI’s resolution framework for Covid-related stress and one-time restructuring of loans.

In response to another query, the government said that 127 cases of fraud were assigned to the Serious Fraud Investigation Office. These pertained to 1,161 companies. Of these, 26 cases pertaining to 326 companies were reported in FY20. There were also 3,431 convictions and Rs 17.3-crore fine imposed during the last five years.