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Bad Loans
Banks have written off non-performing assets (NPAs) or bad loans worth about Rs 16.35 lakh crore in last 10 financial years, Parliament was informed on Monday. Highest amount of Rs 2,36,265 crore was written off during financial year 2018-19 while NPAs worth Rs 58,786 crore were written off in 2014-15, the lowest in the last 10 years. During 2023-24, banks wrote off bad loans of Rs 1,70,270 crore, lower than Rs 2,16,324 crore done in the previous financial year. Banks write off non-performing assets (NPAs), including those in respect of which full provisioning has been made on completion of four years, as per the Reserve Bank of India (RBI) guidelines and policy approved by banks' boards, Finance Minister Nirmala Sitharaman said in a reply in the Lok Sabha. Such write-offs do not result in waiver of liabilities of borrowers and therefore, it does not benefit the borrower, she said. Banks continue pursuing their recovery actions initiated against borrowers under the various recover
Fitch Ratings on Monday said Indian banks have performed robustly in the first nine months of the current financial year with the sector's impaired loan ratio close to the trough. In its commentary, Fitch said improvements in key performance metrics of Indian banks in the past few years will provide strong support for their Viability Ratings (VRs). The global rating agency also said that Indian banks' risk appetites have been more calibrated since 2018, with efforts to diversify loans and improve the quality of corporate exposures contributing to lower bad loan formation. Lower legacy bad loans drove improvement in banks' gross impaired loan ratios and earnings, Fitch said. However, these risk enhancements have yet to be fully tested, and banks have tended to vary risk appetite through cycles, such as growth in unsecured personal loans in recent years until regulatory measures discouraged this behaviour, Fitch noted. "Indian banks performed robustly in the first nine months of the
State-owned Bank of India (BoI) on Friday posted a 35 per cent jump in net profit to Rs 2,517 crore for the December quarter on account of a decline in bad loans. The Mumbai-headquartered bank had earned a net profit of Rs 1,870 crore in the year-ago period. The lenders' total income increased to Rs 19,957 crore during the third quarter of the ongoing fiscal against Rs 16,411 crore a year ago, BoI said in a regulatory filing. The interest income of the bank rose to Rs 18,210 crore against Rs 15,218 crore in the third quarter of the preceding year. Its net interest income (NII) increased to Rs 6,070 crore against Rs 5,463 crore for Q3 FY24. The company's operating profit rose to Rs 3,703 crore from Rs 3,004 crore in the year-ago quarter. On the asset quality front, the bank's gross non-performing assets (NPAs) declined to 3.69 per cent of the gross loans by the end of December 2024 from 5.35 per cent a year ago. Similarly, its net NPAs, or bad loans, came down to 0.85 per cent fr
Finance Ministry will hold a meeting with microfinance institutions (MFIs) on Wednesday amid rising bad loans and delinquencies across all types of lenders in the sector. According to sources, the Department of Financial Services Secretary is likely to chair the meeting with senior officials of MFIs here. The meeting assumes significance as it comes with the sector showing signs of stress and rising delinquencies. Credit to the microfinance sector by banks (including SFBs), NBFC-MFIs and other NBFCs has decelerated during the current financial year so far after witnessing rapid growth during the last three years, according to a latest report of the Reserve Bank. "The microfinance sector is showing signs of stress, with rising delinquencies across all types of lenders and ticket sizes. During H1:2024-25, share of stressed assets increased, with 31-180 days past due (dpd) rising from 2.15 per cent in March 2024 to 4.30 per cent in September 2024," said the RBI's Financial Stability .