NPAs Decline By More Than Rs 1 Lakh Crore In Last One Year

Due to the Central Government's 4R's strategy of Recognition, Resolution, Recapitalisation and Reforms, NPAs have since declined by Rs. 1,06,032 crore to Rs. 7,89,569 crore as on 31.3.2019, a latest update from Finance Ministry noted. As per inputs received from Reserve Bank of India (RBI), as on 31.3.2019, there were 1,938 unique borrowers with funded amount outstanding (FAO) of more than Rs. 25 crore who had defaulted on their loans.

As per RBI data on global operations, aggregate gross advances of Public Sector Banks (PSBs) increased from Rs. 18,19,074 crore as on 31.3.2008 to Rs. 52,15,920 crore as on 31.3.2014. As per RBI inputs, the primary reasons for spurt in stressed assets have been observed to be, inter-alia, aggressive lending practices, wilful default / loan frauds / corruption in some cases, and economic slowdown. Asset Quality Review (AQR) initiated in 2015 for clean and fully provisioned bank balance-sheets revealed high incidence of NPAs. As a result of AQR and subsequent transparent recognition by banks, stressed accounts were reclassified as NPAs and expected losses on stressed loans, not provided for earlier under flexibility given to restructured loans, were provided for.

Further, all such schemes for restructuring stressed loans were withdrawn. Primarily as a result of transparent recognition of stressed assets as NPAs, gross NPAs of PSBs, as per RBI data on global operations, rose from Rs. 2,79,016 crore as on 31.3.2015, to Rs. 8,95,601 crore as on 31.3.2018, and as a result of Government's 4R's strategy of recognition, resolution, recapitalisation and reforms, NPAs have since declined by Rs. 1,06,032 crore to Rs. 7,89,569 crore as on 31.3.2019 (provisional data as reported by RBI on 2.7.2019).

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