NPAs jump 50 bps to 5.1 pc between Mar and Sep quarters: RBI

The bad loan problem continues to mount as gross non performing advances rose to 5.1 per cent as of the September quarter from 4.6 per cent in March 2015, the Reserve Bank said today.
According to the Financial Stability Report (FSR) released by RBI, banks' net NPAs as a percentage of the total net advances increased to 2.8 per cent as of September from 2.5 per cent in March.
However, following the end of Corporate Debt Restructuring (CDR) cell, restructured standard advances as percentage of gross advances declined to 6.2 from 6.4, but stressed loans ratio increased to 11.3 from 11.1 per cent in the same period.

Public sector lenders recorded the highest level of stressed assets at 14.1 per cent followed by private sector banks at 4.6 per cent and foreign banks at 3.4 per cent, the report shows.
As of September 2015, 34 banks with 12 per cent share in advances showed very low stressed advances ratio of less than 2 per cent, whereas 16 banks with 27 per cent share in advances had high stressed advances ratio of over 16 per cent.
Sectoral data as of June 2015 indicate that among the broad sectors, industry continued to record the highest stressed advances ratio of about 19.5 per cent, followed by services at 7 per cent.

As against this, the retail sector recorded the lowest stressed advances ratio at 2 per cent.

In terms of size, medium and large industries each had stressed advances ratio of 21 per cent, whereas, in case of micro industries, the ratio stood at over 8 per cent.
The report also said that five sub-sectors -- mining, iron & steel, textiles, infrastructure and aviation, which together constituted 24.2 per cent of the total advances as of June 2015 -- contributed to 53 per cent of the total stressed advances.
Stressed loans in aviation sector rose 61 per cent in June 2015 from 58.9 per cent in March, while stressed advances in the infrastructure sector increased to 24 per cent from 22.9 per cent during the same period.

The report highlighted that a significant increase in the GNPA ratios of large borrowers among state-run banks from 6.1 per cent in March 2015 to 8.1 per cent in September 2015, led to an increase in the GNPA ratio of the banking system.
The sharp increase in the share of GNPA of large borrowers to the total GNPAs from 78.2 per cent in March 2015 to 87.4 per cent in September 2015 is a major concern to the lending institutions and other stakeholders.