Economic slowdown behind rise in bad loans of PSU banks, says Arun Jaitley

The government has said non-performing assets (NPAs) of PSU banks have mounted due to economic slow down even as recovery increased to Rs 33,486 crore in 2014.

Finance Minister Arun Jaitley on Friday said bad loans amount in the last financial year has mounted to Rs 2,45,809 crore from Rs 1,83,854 crore in 2012-13 and Rs 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 Question Hour in Lok Sabha.

Jaitley said 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.

India's economy has posted sub-5 per cent growth for the last two consecutive financial years.

Jaitley said many industries have suffered losses in the last two years leading to their inability to repay the loans. "Besides, there are many people whose intentions are not good. They do not want to repay the loans," he said.

The Finance Minister said the Reserve Bank of India has taken a number of steps to recover the bad loans of PSU banks that resulted in recovery of Rs 33,486 crore in 2014, Rs 19,832 crore in 2013 and Rs 17,272 crore in 2012.

Jaitley said the central bank also set up a Central Repository of Information on Large Credits (CRILC) to collect, store and disseminate credit data to banks on credit exposures of Rs 5 crore and above.

"RBI has issued instructions to the banks to review slippages in asset classification in the borrowal accounts with outstanding Rs 5 crore and above by the Board of Directors of the bank and review NPA accounts which have registered recoveries of Rs 1 crore and above. Further, Management Committee of Board should review top 100 borrowal accounts of below Rs five crore in each category of NPA," Jaitley said.