Bad loans biggest challenge facing public sector banks: FM

Tags: Banking
Concerned over rising non- performing assets, Finance Minister P Chidambaram today asked public sector banks to focus on recovery of bad loans, which happen to be high among large corporate accounts.

Addressing a press conference after reviewing performance of PSU banks, he also said that credit disbursal to medium- sized industry has declined and was only "satisfactory" in the agricultural sector.

"Biggest challenge facing the public sector banks is NPAs and their asset qualities," he said, adding that a large part of the meeting with banks' chiefs was focused on bad loans and the steps needed for the recovery.

Pointing out that NPAs were "high in large corporate sectors" and small industries, although they were down for the real estate segment, Chidambaram said banks have been told to focus on recovery.

NPAs or bad loans of PSU banks rose by 28.5 per cent from Rs 1.83 lakh crore in March, 2013 to Rs 2.36 lakh crore in September last year.

The Minister also said the banks recovered Rs 18,933 crore worth of bad loans during the April-December period.

Banks have been monitoring their top 30 bad loan accounts for quite some time now.

To a specific query regarding the bad loans with United Bank of India (UBI), he said the issue would be separately discussed with RBI Governor Raghuram Rajan on Friday.

Chidambaram, however, said the UBI has managed to recover Rs 1,200 crore in January and February.

When asked about the curbs on import of gold, he said the government would revisit the customs duty only after factoring in the final Current Account Deficit (CAD) numbers for the 2013-14 financial year.

Chidambaram held the 'Quarterly Performance Review Meeting' with the Chief Executive Officers (CEOs) of state owned banks and financial institutions.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • Those willfully defaulting on loans should be blacklisted by Sebi

    As reported by this newspaper’s Monday edition, the Securities and Exchange Board of India (Sebi) has found merit in the Reserve Bank of India’s s

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Arun Kumar Jain

Kickstarting technological innovation

One of the key dimensions of global competitiveness is the ...

Kuruvilla Pandikattu SJ

Developing moral, spiritual capacity

Writing in The Huffington Post, Noam Chomsky, professor emeritus, MIT ...

Gautam Gupta

Manufacturing must keep workers’ welfare in mind

It may be early days yet, but the labour reforms ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture