As a result of various steps taken by the government, the non-performing assets (NPAs) or bad loans of banks have come down by Rs 61,180 crore to Rs 8.34 lakh crore at the end of March 31, 2021, Minister of State for Finance Bhagwat K Karad said on Monday. Scheduled Commercial Banks (SCBs) were carrying NPAs of Rs 8.96 lakh crore on their balance sheets at the end of March 2020.
“Primarily as a result of transparent recognition of stressed assets as NPAs, the gross NPAs of SCBs, as per RBI data on global operations, increased from Rs 3,23,464 crore as on March 31, 2015, to Rs 10,36,187 crore as on March 31, 2018, and as a result of the Government’s strategy of Recognition, Resolution, Recapitalization and Reforms, has come down to Rs 9,33,779 crore as on March 31, 2019, to Rs 8,96,082 crore as on March 31, 2020, and further to Rs 8,34,902 crore by March 31, 2021, (provisional data), ”he said.
MoS for Finance said in a written reply in Lok Sabha that the COVID-19 Regulatory Package announced by the RBI has allowed lending institutions to grant a moratorium of six months on payment of all installments due between March 1 and August 31, 2020, in respect of all term loans and deferment of recovery of interest for the same period in respect of working capital facilities.
Gross NPA of PSBs declined Rs 2.78 lakh crore from FY18 to FY21
Bhagwat K Karad said, “Gross NPAs of Public Sector Banks (PSBs) peaked at Rs 8,95,601 crore as on March 31, 2018. As a result of the government’s strategy of Recognition, Resolution, Recapitalization and Reforms, there has been a decline in NPAs to Rs 7,39,541 crore as on March 31, 2019, Rs 6,78,317 crore as on March 31, 2020, and Rs 6,16,616 crore as on March 31, 2021 (Provisional data).
Net NPA decreased to Rs 1.97 lakh crore in FY21
“Net NPAs have shown a similar trend, initially increasing from Rs 1,24,095 crore as on March 31, 2014, to Rs 2,14,549 crore as on March 31, 2015, Rs 3,24,372 crore as on March 31, 2016 and reached Rs.4,54,221 as on March 31, 2018, and declining thereafter to Rs.2,84,689 crore as on March 31, 2019, Rs.2,31,551 crore as on March 31, 2020 and further to Rs 1,97,360 crore as on March 31, 2021 (provisional data),”MoS for Finance Bhagwat K Karad said.
PSBs Operating Profit increased to Rs 1.74 lakh crore in FY20
During this period, he said, PSBs continued to earn a total operating profit of Rs 1,37,151 crore, Rs 1,58,994 crore, Rs 1,55,603 crore, Rs 1,49,819 crore, Rs 1,74,640 crore in the financila year 2015-16, 2016-17, 2017-18, 2018-19 and 2019-20 respectively.
Simultaneously, comprehensive steps were taken to control and to effect recovery in NPAs, so that PSBs could recover Rs 5,01,479 crore over the last six financial years, MoS for Finance Bhagwat K Karad said
What Is a Non-Performing Asset (NPA)?
Non-Performing Asset (NPA) refers to the classification of loans or advances that are in default or arrears. A loan is outstanding when principal or interest payments are late or defaulted. A loan is in default when the lender considers the loan agreement to be broken and the debtor is unable to meet its obligations.