Rising NPAs of PSU banks unacceptable: Chidambaram

Concerned over rising bad loans, Finance Minister P Chidambaram today said the increasing non-performing assets (NPAs) of public sector banks is unacceptable.
"It (NPA) is not a sharp rise, but a rise still and this is what is a matter of concern. I have said, sorry this is unacceptable. You have to flatten this (NPA) curve and let it drop again," he told reporters after taking stock of the performance of PSU banks here.
Showing a chart of NPAs of PSU banks, Chidambaram, however, said there has been a "tremendous improvement" in the banking sector in past 12-13 years.
The gross NPAs of PSU banks, which had touched 14 per cent in 2000, came down to a low of 2.09 per cent in 2008-09.

As of June, the gross NPA of nationalised banks was 3.89 per cent and for the SBI Group it was 5.50 per cent of total advances.
However, in the wake of the global financial crisis, there has been an uptick in bad loans in the banking sector.

The Finance Minister, however, sounded confident that the NPA situation would improve once economic growth picks up and the cash flow of companies improves.
He said the top 30 NPA accounts in each bank in each zone is being monitored.
"It is a matter of concern that it is the big borrowers (with loans of over Rs 1 crore) who are defaulting," Chidambaram said.

Seeking to dispel the impression of subdued economic activity, Chidambaram said, "Things are not as gloomy as sometimes it is painted. There are new proposals, they are being cleared...Things are moving."
He said 137 large projects have either been approved or were in advanced stages of clearance during April-September.
Meanwhile, the Finance Ministry has finalised the Rs 14,000 crore capital infusion plan for PSU banks.