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Non-priority sector loans worsen NPA headache for public sector banks

These bad debts constitute 23% of advances of 10 PSBs at the end of FY18

non-performing assets (NPA) of public sector banks (PSB)

The headline number for non-performing assets (NPA) of public sector banks (PSB) masks the sharp deterioration of their industry loan books over the past year. A Business Standard analysis of the balance sheets of 10 PSBs shows that a staggering 23 per cent of loans to industry in the non-priority segment turned bad at the end of FY18, up from 15.6 per cent at the end of FY17. In the case of some banks, over 50 per cent of loans to industry turned bad. These numbers suggest the headline numbers of bad debts have been dragged down by lower defaults in the priority loan book ...