Raghuram Rajan concerned about NPAs in public sector banks

Expressing concern over rising NPAs, Reserve Bank Governor Raghuram Rajan on Friday said the situation would improve with stabilisation of the economy.

"Rising NPAs in PSU banks are a concern...Here in India, especially in PSBs, not in private banks, we have growing NPAs. Hopefully, it will stabilise. It has become somewhat an issue," he said at an event in New Delhi .

Non-performing assets (NPAs) or bad loans of PSU banks rose by 28.5 per cent from Rs 1.83 lakh crore in March 2013 to Rs 2.36 lakh crore in September 2013.

Referring to the economy, Rajan said though India is going through a period of turmoil, growth appears to be stabilising.

Having touched a decade-low of 4.5 per cent in 2012-13, India's economic growth rate is projected to improve to 4.9 per cent in the current financial year ending March 31.

The issue of rising NPAs was also flagged by ICICI Bank Managing Director and Chief Executive Officer Chanda Kochhar, who attributed it to external factors.

She said the banking sector had successfully overcome the 2008 crisis and will improve further with the revival in the economy.

"The economy has bottomed out...There is a need to bring back investment to revive the economy," she said, adding that there was a need to improve the decision-making environment.