PSU Banks and their Bad Loans

It is indeed alarming to note that over 1,463 entities form the bad loans portfolio of 21 PSU Banks, which amounts to over Rs. 1 billion rupees.  Following is a quick glance related to few banks:

• The Gross NPA assets of PSU banks stood at 7.34 trillion by the end of second quarter of this fiscal
• RBI directs banks to refer 12 account, with fund based and non-fund based outstandings greater than Rs. 50 billion out of which 60 per cent or more is classified as NPA as on 31^st March 2016.
• This move of RBI is for initiating insolvency process under the Insolvency and Bankruptcy code 2016.

GENERAL

1. Increase in NPAs has brought down the PSU banks’ lending capacity due to extra provisions made for Bad loans.
2. Government has come out with a plan of infusing 2.12 trillion towards recapitalization and necessary Parliamentary approval has already been obtained for pumping in Rs. 800 billion through recapitalization bonds in the current fiscal ending March 2018.