Top 30 NPA accounts of PSU banks under government scanner

According to Chidabaram, the Indian government is monitoring top 30 non-performing assets in all state-run bank in each zone

Concerned over defaults by big borrowers, Finance Minister P Chidambaram on Tuesday said that the union government is monitoring the top 30 non-performing assets (NPAs) account in each state-run lender and asked the Banks to set up separate verticals to recover the money from written-off accounts.

Talking to reporters after meeting the heads of public sector unit (PSU) banks, Chidambaram said, “We are monitoring the top 30 NPA accounts in each bank, each zone. It is a matter of concern that it is the big borrowers (with loans of over Rs1 crore) who are defaulting”.

Chidambaram said he hoped that NPAs are a function of economy and would improve with the recovery in economic growth.

The minister said the situation was not as bad as it was in 2000, when gross NPAs touched a high of 14%. NPAs, which plateaued over the years at about 2%, have started creeping up with the deceleration in growth in the past few years.

As of June, the gross NPA of nationalised banks was 3.89% and State Bank of India (SBI) group at 5.5%.

Chidambaram said like State Bank of India, other PSU banks should set up separate verticals to recover as much as possible from the accounts that were written off.

The Minister, however, expressed satisfaction over credit growth by PSU banks in the first and second quarters of the current financial year and expressed hope that it will remain “satisfactory” in the remaining part of the fiscal.

Chidambaram said housing loans recorded a healthy growth in the first and second quarters and rose 42% and 61%, respectively.

Education loans also registered growth, he said, adding that banks have been asked to meet the lending target with regard to minorities.

The minister said PSU banks will open 10,000 new branches and set up 34,668 onsite ATMs during the course of the current financial year.

Referring to the current account deficit (CAD), the finance minister said that the government does not intend to lift the ban on gold coins and medallions.

The government had imposed restrictions on import of gold with a view to contain CAD, which widened to an all-time high of 4.8% of GDP in 2012-13. During the current fiscal, CAD is expected to narrow to below 3.7% of GDP.

 
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