Parliamentary panel deliberates on steps needed to contain bad loans

The committee has decided to call RBI officials at its next meeting to discuss the same

Members of Parliament (MPs) today expressed concerns over a spurt in bad loans of PSU banks, and deliberated on steps needed to effectively contain non-performing assets (NPAs), which have jumped to Rs 2.36 lakh crore.

The issue of rising NPAs was discussed by the Parliamentary Standing Committee on Finance under the chairmanship of Senior BJP leader and former finance minister Yashwant Sinha.

The committee, which heard the views of Finance Ministry officials on rising bad loans, has decided to call RBI officials at its next meeting.

The discussions, according to a member, focused on the definition of willful defaults, rising bad loans of corporates and small borrowers.

"Many members expressed concerns over the issue of growing amount of NPAs of public sector banks. They also pointed out the issue of substantial proportion of corporate loans in NPAs," the member said.

The NPA or amount of bad loans of public sector banks rose by 28.5 per cent from Rs 1.83 lakh crore in March, 2013 to Rs 2.36 lakh crore in September last year, as per the information provided by the Finance Ministry to Parliament in the recent Winter session.

The total NPAs had gone up to Rs 1.37 lakh crore in March, 2012 from Rs 94,121 crore in March 2011. Thus the amount of NPA in September last year was more than double of what was in March 2011.

According to information provided by the Finance Ministry, top 30 loan defaulters of public sector banks (PSBs) account for more than one-third of total gross NPAs of state-run lenders.

"The ratio of top 30 NPAs as a percentage of gross NPAs, in respect of public sector banks, as on September 2013 is 35.5 per cent and for all banks it is 38.8 per cent," Finance Minister P Chidambaram had said in a written reply to the Rajya Sabha.