NPAs a challenge; govt committed to issue: Shaktikanta Das
19 Sept 2015 7:34 AM IST
Expressing concern over mounting bad loans in the banking sector, Economic Affairs Secretary Shaktikanta Das on Friday said the government is “fully engaged” in resolving the issue.
“Some challenges still remain. The banking sector and NPAs are the challenges and <g data-gr-id="80">government</g> is fully engaged on those issues,” he said.
Gross Non Performing Assets (NPAs) of state-owned banks at the end of March quarter stood at
5.20 per cent. <g data-gr-id="30">Non Performing</g> Assets (NPAs) have surged mainly due to stress in infrastructure sectors like highways, steel, power and state <g data-gr-id="29">discoms</g>.
Finance Minister Arun Jaitley last month had said present level of <g data-gr-id="26">Non Performing</g> Assets (NPAs)
are unacceptable.
“An all-out effort has been launched to correct the health (of banks) and bring NPAs down. The effort by the bank administration, the effort by the government to infuse more capital, the effort to get more finance by divesting (government holding), and then greater discretion and more importantly addressing the concerns of each of (stressed) sectors.
“And I don’t have a doubt that over the next few quarters, the banks will be able to address these challenges,” Jaitley had said.
He had also said the government’s plan to inject capital into the PSU banks over the next four years will “infuse lot of financial strength” in these banks to deal with the bad debts problem.
Stressed assets likely to come down: SBI
Country’s biggest lender State Bank of India (SBI) today said stressed assets in the system are likely to see a decline due to reforms in power distribution companies and pick up in rural power demand. “With reforms initiated in the power distribution companies and pick up in the rural power demand, stressed assets in the system are likely to come down”, MD (compliance and risk) of SBI Rajnish Kumar told reporters on the sidelines of a CII event here. SBI also expects that asset quality in terms of slippages and recoveries in the current quarter ending September 30 to be better than last quarter, he said. Asked about the possibility of a rate cut by the Reserve Bank, he said it is expected to reduce the policy rate in the upcoming monetary policy review on September 29. “I believe that RBI would reduce <g data-gr-id="94">rate</g> in the upcoming monetary policy. The market expectation is of a 25 basis points cut”, he said.
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