Chennai: System-wide gross non-performing assets of banks rose to 11.2 per cent or at Rs 10.39 trillion in FY18 from 9.3 per cent a year ago, and the share of public sector banks stood at Rs 8.95 trillion, or at 14.6 per cent, the Reserve Bank has said.
In FY17, system-wide gross NPAs stood at 9.3 per cent and that of State-run lenders stood at 11.7 per cent.
“During FY18, the GNPA ratio reached 14.6 per cent for State-run banks due to restructured advances slipping into NPAs and better NPA recognition,” the RBI said in its report on “Trends & Progress of Banking in 2017-18” that was released yesterday.
In terms of the net NPA ratio, State-run banks saw significant deterioration at eight percent in FY18 from 6.9 per cent year-ago. Private sector peers banks’ GNPA ratio stood at a much lower level of 4.7 per cent as against 4.1 per cent in FY17.
“Resolute efforts on the part of private sector banks to clean up their balance sheets through higher write-offs and better recoveries also contributed to their lower GNPA ratios,” the report said. Asset quality of foreign banks improved marginally to 3.8 per cent in FY18 from four per cent in FY17.
In FY18, the share of doubtful advances in total gross NPAs increased sizeably to Rs 5.11 trillion or 6.7 per cent of the system, driven up by State-run banks whose ratio stood at nine per cent.
On the other front, a senior official has stated that various initiatives taken by the government with respect to NPAs have yielded results, as bad loans of public sector banks declining by over Rs 23,000 crore from a peak of Rs 9.62 lakh crore in March.
At the same time, public sector banks (PSBs) have also made a record in recovery of Rs 60,726 crore in the first half of the current financial year, which is more than double the amount recovered in the corresponding period last year.
“Gross non-performing assets (NPAs) of PSBs have started declining after peaking in March 2018, registering a decline of Rs 23,860 crore in the first half of the current financial year,” Financial Service Secretary, Rajiv Kumar, said.
According to the latest Finance Ministry data, non-NPA accounts overdue by 31 to 90 days of PSBs have declined by 61 per cent over five successive quarters – from Rs. 2.25 lakh crore as of June 2017 to Rs 0.87 lakh crore in September.