Private corporate sector has massive bad loans, says FM
6 March 2014 5:59 AM IST
‘The biggest challenge facing the public sector banks is NPAs and asset quality... NPAs are high in large corporate sector as well as in the SSI and MSE sector,’ he said.
Without providing NPA data of PSU banks for this financial year, Chidambaram said it is ‘likely to be a little higher’ over 2012-13, when NPAs stood at 3.84 per cent.
Stressing the importance of addressing non-performing assets, the minister said, ‘We have told them (banks) to focus on recovery and banks are focusing on recovery.’
He said the efforts have yielded some results as PSU banks recovered Rs 18,933 crore of bad loans during the nine months through December 2013.
Bad loans of public sector banks rose 28.5 per cent to Rs 1.83 lakh crore in March 2013 over the preceding September.
PC to discuss UBI crisis with RBI Guv Rajan on Friday
New Delhi: Finance Minister P Chidambaram on Wednesday said that he will discuss United Bank of India's bad loan crisis with the Reserve Bank Governor later this week. ‘United Bank is a special case. We will deal with that. It's not an alarming case...UBI issue will be discussed separately when the governor comes here on 7 March and we know the path forward. It will be resolved on 7th,’ he said.
The Finance Minister is scheduled to address the Reserve Bank of India board here on 7 March. Kolkata-based UBI posted a net loss of Rs 1,238 crore in the three months ended December, during which its gross non-performing assets (NPAs) surged to Rs 8,546 crore from Rs 2,964 crore at the end of March last year.
UBI has recovered Rs 400 crore in cash and has upgraded Rs 800 crore worth of accounts. NPAs have been reduced by Rs 1,200 crore, Chidambaram said after meeting with chief executives of PSU banks and financial institutions here. The minister said a large part of the meeting was focused on bad loans and the steps needed to recover them. Chidambaram indicated the government would soon appoint a chairman.
Archana Bhargava quit as UBI Chairperson and Managing Director in February, opting for voluntary retirement on health grounds. Bhargava had taken charge as CMD in April 2013 and her term was to have ended in February 2015.
‘At the moment there is executive director and we will strengthen the management of United Bank,’ Chidambaram said. An administrative enquiry is under way to find out why UBI's NPAs had been under-reported. Following the rise in bad loans, the Reserve Bank had ordered a forensic audit by a firm, which has submitted its report. The government, which holds an 88 per cent stake in the bank, has provided Rs 700 crore as capital to UBI in this financial year.
Without providing NPA data of PSU banks for this financial year, Chidambaram said it is ‘likely to be a little higher’ over 2012-13, when NPAs stood at 3.84 per cent.
Stressing the importance of addressing non-performing assets, the minister said, ‘We have told them (banks) to focus on recovery and banks are focusing on recovery.’
He said the efforts have yielded some results as PSU banks recovered Rs 18,933 crore of bad loans during the nine months through December 2013.
Bad loans of public sector banks rose 28.5 per cent to Rs 1.83 lakh crore in March 2013 over the preceding September.
PC to discuss UBI crisis with RBI Guv Rajan on Friday
New Delhi: Finance Minister P Chidambaram on Wednesday said that he will discuss United Bank of India's bad loan crisis with the Reserve Bank Governor later this week. ‘United Bank is a special case. We will deal with that. It's not an alarming case...UBI issue will be discussed separately when the governor comes here on 7 March and we know the path forward. It will be resolved on 7th,’ he said.
The Finance Minister is scheduled to address the Reserve Bank of India board here on 7 March. Kolkata-based UBI posted a net loss of Rs 1,238 crore in the three months ended December, during which its gross non-performing assets (NPAs) surged to Rs 8,546 crore from Rs 2,964 crore at the end of March last year.
UBI has recovered Rs 400 crore in cash and has upgraded Rs 800 crore worth of accounts. NPAs have been reduced by Rs 1,200 crore, Chidambaram said after meeting with chief executives of PSU banks and financial institutions here. The minister said a large part of the meeting was focused on bad loans and the steps needed to recover them. Chidambaram indicated the government would soon appoint a chairman.
Archana Bhargava quit as UBI Chairperson and Managing Director in February, opting for voluntary retirement on health grounds. Bhargava had taken charge as CMD in April 2013 and her term was to have ended in February 2015.
‘At the moment there is executive director and we will strengthen the management of United Bank,’ Chidambaram said. An administrative enquiry is under way to find out why UBI's NPAs had been under-reported. Following the rise in bad loans, the Reserve Bank had ordered a forensic audit by a firm, which has submitted its report. The government, which holds an 88 per cent stake in the bank, has provided Rs 700 crore as capital to UBI in this financial year.
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