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'Slowdown likely to push banks' stressed assets to Rs.10 lakh cr'
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SME Times News Bureau | 18 Apr, 2016
Industry body Assocham on Sunday said that the slowdown in steel, textiles, aluminium and others coupled by ongoing Asset Quality Review (AQR) is likely to push banks' stressed assets to Rs.10 lakh crore mark in the fourth quarter of 2015-16.
"At the end of December (2015), the total stressed assets (Gross NPA plus restructured assets) of all the banks were at Rs.8 lakh crore which is expected to see a significant jump in the current quarter itself," said a study by the industry body.
It said total stressed assets of banks rose four-fold to Rs.7.40 lakh crore by the end of March 2015 from Rs.2.33 lakh crore as of March 2011.
Some reasons attributed to the bad assets spike include Indian central bank's AQR and other factors.
Assocham noted that in nine months from April to December 2015, gross non-performing assets (NPA) rose by Rs.1 lakh crore from Rs.2,98,641 crore to Rs.4,01,590 crore.
"Gross NPAs of state-run banks increased from Rs.2,67,065 lakh crore in March 2015 to Rs. 3,61,731 lakh crore in December 2015. In contrast, the private sector banks' gross NPA rose to Rs.39,859 crore at the end of December from Rs.31,576 crore at the end of March 2015," said an Assocham statement.
In percentage terms, gross NPA ratio of public sector banks shot up from 5.43 percent in March 2015 to 7.30 percent by December 2015, the study said.
"The fact that banks are expecting subdued last quarter numbers due to mounting bad loans was evident from their advance tax deposits. State Bank of India paid an advance tax of Rs.690 crore as against Rs.1,749 crore deposited in the March quarter last fiscal, a decline of about 60 percent," the study added.
Assocham highlighted that mounting loans have made 11 PSBs report losses of Rs.12,867 crore in Q3 of 2015-16.
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stressed accounts and NPA
Srivathsan.Mysore | Thu Apr 21 17:02:18 2016
The AQR must be reviewed with Indian habit of account playable for the goods and services rendered by the entrepreneur either B2B or B2G. Present day bankers are safest in giving housing loan to salaried section car loan to salaried section and they have poorest management skill to provide loan to SME who are the backbone of generating revenue to govt. The advance Felicity to SME must be handled by different institution more so who are under Credit guarantee scheme. They are the revenue generators to govt and employment generators with lowest capital.If the present trend contuses regarding bankers attitude towards SME there will be industry in this sector.
Stressed assets of Bank
Srivathsan | Thu Apr 21 02:38:17 2016
AQR must be reviewed and must b e in relation to financial dynamics of country. It is easy to close an enterprise especially SME since they are very vulnerable. just because they could not mobilize funds for making bank payment. Their receipts from various bossiness house or govt is not mandated to be paid within specified time.This system has to change and SAKAL( timely payment from govt should start ).
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