Total NPAs of banks increase to Rs 3,00,611 crore

The Non Performing Assets (NPAs) of the banks in the country stood at Rs 3,00,611 crore as on December 2014, government told Lok Sabha today, attributing the increase of NPAs to sluggishness in growth.

Of the total NPAs, Rs 2,62,402 crore belonged to nationalised banks, Rs 38,209 belonged to private sector banks, Minister of State for Finance Jayant Sinha said during question hour.

He said the total gross advances of nationalised banks as on December 2014 stood at Rs 46,49,843 crore while the total advances of private sector banks stood at Rs 16,77,875 crore.

The Minister cited stalled projects, sluggishness in the domestic growth in the last few years and slowdown in the global economy as the key reasons for the increase of NPAs.

In case where staff connivance is noticed alongwith borrower, banks take action as per the Reserve Bank of India circular on frauds.

"As per master circular, banks conduct enquiry to fix up staff accountability and impose minor or major penalties depending on merit of each case.

"In the period from April 2011-December 2014, as per the information provided by 20 major PSU banks, after conducting enquiries into the staff lapses in NPA cases, 470 employees were dismissed and major and minor penalties were imposed on 5177 and 5811 employees respectively," he said.

Sinha said RBI has taken a number of steps for recovery of NPAs that include having a Board approved loan recovery policy, putting in place an effective mechanism for information sharing for sanction of loans and taking recourse to legal mechanism.

The RBI has released guideliness on January 30, 2014 for 'Early Recognition of Financial Distress, Prompt Steps for Resolution and Fair Recovery for Lenders: Framework for Revitalising Distress Assets in the Economy' suggesting various steps for quicker recognition and resolution of stressed assets.