Govt monitoring top 30 NPA accounts of banks: Finance Minister

Finance Minister P. Chidambaram held that the government was keeping a close watch on the top 30 Non-Performing Assets (NPA) accounts of big borrowers (with loans of over Rs.1 crore) in each public sector bank, and asked the lenders to set up separate verticals to recover money from written-off accounts.
As per the Minister, the current situation is not as bad as it was in 2000, when gross NPAs reached a high of 14%. As of June 2013, the gross NPA of nationalized banks was 3.89%, and that of the State Bank group at 5.50%.
Other public sector banks have been advised to set up separate verticals to recover as much as possible from the accounts that were written off.
According to the Minister, the problem of NPAs has resurfaced after a normal period of 2009-10 and 2010-11 due to slowdown in the economy. However, he hoped that once the economy starts picking up the NPAs will come down.

Capital infusion of Rs.14,000 cr

The Finance Ministry has finalized the Rs.14, 000 crore capital infusion plan for public sector banks to strengthen their capital base, and promised another share in the fourth quarter of the current fiscal. The capital infusion would ensure that banks had 8% Tier-1 capital by the end of the current fiscal year.

Month: Current Affairs - October, 2013