Bank of Maharashtra sees gross NPAs hovering around 8% in FY16

In the preceding two quarters, gross NPAs were 7.98% and 7.86% respectively

State-run Bank of Maharashtra sees its gross non-performing assets or bad loans to be about 8 per cent of gross advances in 2015-16, a top official said.

Bank of Maharashtra's gross NPAs were at 7.97 per cent of gross advances during the third quarter (October-December) of 2015-16 financial year.

In the preceding two quarters, gross NPAs were 7.98 per cent and 7.86 per cent respectively.

"This trend will continue because the contingency effect is still there", Bank of Maharashtra Chairman and Managing Director Sushil Muhnot said.

Public sector banks are grappling with bad loans problem and there have been efforts both on the part of the RBI and the government so that the lenders could clean up their balance sheets.

Data from corporate database provider Capitaline shows that gross NPAs of 39 listed banks rose to Rs 4.38 lakh crore in the quarter ended 31 December from Rs 3.4 lakh crore at the end of the September quarter.

Finance Minister Arun Jaitley has also asked state-owned banks to clean up their balance sheets at the earliest, stressing that they had all the powers to deal with wilful defaulters.

Asked about credit growth, Muhnot said it will take some more time to pick up.

There has been weak demand both from rural as well as industrial sector, he said.

He expressed hope that the likely prospects of a good monsoon this season will help revive the credit demand and boost the economy.