Press trust of india
New Delhi, August 23: Reserve Bank of India (RBI) deputy governor SS Mundra Tuesday said the pace of formation of new non-performing assets (NPAs) or bad loans has decelerated though some banks have posted losses for the first quarter of the current financial year due to higher provisioning.
He also said most of the banks are adequately capitalised and the government has promised additional capital if they require.
In a bid to shore up cash-strapped public sector banks, the government last month announced an infusion of Rs 22,915 crore capital in 13 lenders including State Bank of India and Indian Overseas Bank to revive loan growth that has hit a two-decade low.
As far as bad loans are concerned, he said, they are showing a mixed trend.
“When I look at individual results, there are number of banks for whom it appears that the worst is over but then there are other banks…still they are in middle of it and they would need to do some work before they get out of it,” he said.
“It would be naive to believe that there won’t be any NPA formation but the pace of new NPA formation has clearly decelerated, that is what the major trend is,” he added.
Gross NPAs of the public sector banks had surged from 5.43 per cent (Rs 2.67 lakh crore) of advances in 2014-15 to 9.32 per cent (Rs 4.76 lakh crore) in 2015-16.
As per the latest Financial Stability Report by the RBI, the gross NPA ratio for public sector banks may go up to 10.1 per cent by March 2017 under the baseline scenario. Many banks including Bank of India, Dena Bank, and Central Bank of India, reported losses for the quarter ended June 30, due to a sharp jump in provisions for NPAs on account of an asset quality review mandated by the RBI in December.
Talking about the recapitalisation, Mundra said the finance minister has indicated that if there is a need the government would be ready to provide additional capital.
| Twitter deletes fake account of Urjit Patel New Delhi: Twitter has deleted a fake handle created in the name of RBI governor-designate Urjit Patel that was used to respond to congratulatory messages following his appointment Saturday. The Twitter handle ‘@urjitpatel_’ shot into limelight instantly after the government announced Patel as the successor of Raghuram Rajan on his completion of three-year term September 4. The handle had tweeted messages thanking well-wishers who began using that handle to congratulate Patel. RBI had instantly denied that Patel does not own the handle and now micro-blogging site Twitter has deleted the account. The fake handle was opened in June this year but was not used to tweet anything before Saturday. |
