Top 10 defaulters of public sector banks account for Rs 28,000 crore of NPAs

The top 10 defaulters account for a staggering Rs 28,152 crore of non-performing assets (NPAs) of public sector banks (PSBs), which have seen their profits coming down sharply due to the bad loans.

As many as 433 borrowers have taken loans of more than Rs 1,000 crore and above amounting to Rs 16.31 lakh crore, minister of state for finance Jayant Sinha said in a written reply to the Rajya Sabha on Tuesday.

The Reserve Bank of India (RBI) maintains data on borrowers, including corporates, who have borrowed Rs 5 crore and above including NPAs if any, Sinha informed.

Indian Overseas Bank (IOB) had last month reported net loss of Rs 516.03 crore for the third quarter as against Rs 75.07 crore in the year-ago period on higher provisions for bad loans.

"The net loss is due to increased provisions for domestic and overseas advances and also due to the conscious decision by the bank in containing its credit growth," IOB had said in a statement.

Oriental Bank of Commerce had announced a staggering 91.2-per cent fall in net profit to a mere Rs 19.56 crore for the third quarter on account of higher provisioning for bad loans and restructuring of assets.

OBC had a reported net profit of Rs 224.30 crore in the October-December quarter of 2013-14.

Gross NPAs of OBC rose sharply to 5.43 per cent from 3.87 per cent in the year-ago period.

Sinha said that to improve the health of the financial sector, reduce the NPAs, improve asset quality of banks and to prevent slippages, the RBI has issued instructions, including designing framework for revitalising distressed assets.

As per the framework, every bank has a Board-approved loans recovery policy and it requires a robust mechanism for early detection of signs of distress, including prompt restructuring in the case of all viable accounts.

It has been stipulated to review NPA accounts of Rs 1 crore and above by the Board and top 300 NPA accounts by the management of the Board, he said.