Banks' bad loan rising on pending projects: PHDCCI

The burden of rising bad loans on banks can be reduced by speedy clearances and execution of pending projects, a top official of industry body PHD Chamber of Commerce & Industry said.
In an interview with PTI, the newly elected president of the chamber, Sharad Jaipuria, said economic slowdown and pending projects are the major reasons for rising bad loans of banks.
"Many of the projects are pending due to lack of clarity on the policy front between central and state governments, while many projects are being held up because of unavailability of raw materials such as coal," he said.

Jaipuria, who is the Chairman & Managing Director of Ginni International, said that Congress Vice-President Rahul Gandhi has also accepted that there have been some hurdles on part of the government to execute these projects and all the impediments should be removed.
The Reserve Bank in its eighth Financial Stability Report expressed concerns on rising bad loans of public sector banks. The report cautioned if the situation is not improved, it may affect the banking system as well.
In the last six months, there has been in an increase in bad loans of banks and their gross NPAs which stood at 4.2 per cent in the quarter ended September may rise to 4.5 per cent by September 2014, says the report.

On expectations of the industry from the new government after the General Elections, Jaipuria said: "Whosoever forms the government at the Centre after the elections, it should be strong and stable."

"There should be confidence in the industry and businesses, policies should be implemented fast, and the projects which are being held up should be given speedy clearances. This will ensure disbursal of loans to these projects and thrust growth."
He said projects worth Rs 10 lakh crore are being held up due to various reasons. Fast implementation of these projects will generate employment and thrust the economic growth.
He also emphasised on early implementation of GST, saying the tax regime will add about 2 per cent to the GDP (gross domestic product).

On inflation, Jaipuria said the agriculture sector needs major reforms. "The farmers should be given information on crops before sowing and there is a need to develop mixed-crop technology. Vegetables could be grown alongwith traditional crops such as wheat and paddy.
"Most importantly, there is a need to develop storage facility to prevent wastage of vegetables and fruits.