Due to Modi government 'strictness’, lack of Rs 23,860 crore in NPAs of public sector banks
Monday - December 31, 2018 11:52 am ,
Category : WTN SPECIAL
Significant increasing in the recovery of public sector banks
Indian banking system on the track gradually after the demonetization
DEC 31 (WTN) – This is the result of the Modi government's efforts is that there has been a sharp reduction in the bad loans of government banks and the banks have mostly identified the stressed assets. According to the information, gross non-performing assets (NPAs) of public sector banks are decreasing after reaching their highest level in March. For your information, let you know that in the first half of fiscal year 2019, there has been a decrease of Rs 23,860 crore, which is a remarkable feat in itself.
According to information received from the media, the work of identifying bad loans and showing them in balance sheet is almost completed. Restructured Standard Assets had fallen from the highest level of 7 per cent in March 2017 to 0.59 per cent from September 2018.
According to the data released by the Finance Ministry, the loan accounts which have been delayed by 31 to 90 days and those have not yet converted into NPAs, and these with significantly decreasing in last five quarters, have reached up to 61 per cent at the label of 0.87 lakh crore in September 2018. In June 2017, such NPA was worth 2.25 lakh crores. It is evident that now the new bad loans are becoming very low.
For your information, let you know that in the first half of this financial year, the government banks have recovered recorded Rs 60,726 crore, and this recovery is twice recovered in the same quarter one year ago. According to the information, the Provision Coverage Ratio (PCR) of banks was 46.04 per cent in March 2015, which increased to 66.85 per cent by September 2018. This means that there has been an increase in the ability of banks to 'bear the loss'.
During these times, the government is investing more money in public sector banks. The Center believes that at least two or three banks will come out form the Reserve Protection Bank's Prompt Corrective Action (PCA) framework before this fiscal year ends. For your information, let you know that Finance Minister Arun Jaitley has already cleared about investing in public sector banks and it is said that 41 thousand crore rupees will be given to some public sector banks.
By doing so, the amount levied in the government banks by the central will increase from Rs 65,000 crores to Rs 1.06 lakh crores. In this matter, Finance Minister Arun Jaitley says that this will increase the ability of government banks to let the loan and they will also be able to come out of the Reserve Bank's PCA i.e. Prompt Corrective Action Framework.
For your information, let you know that in the PCA those banks are inserted which can’t follow certain standards. Prompt Corrective Action means that after inserting in PCA framework, banks aren’t allowed to lend loans and open new branches.
The way the government's gross non-performing assets (NPAs) have decreased by Rs 23,860 crore in March, it is worth the praise. The way the Modi government is constantly working for banking reform, it is clear that gradually after the demonetization the Indian banking system is getting on track and its ability to bear financial loss has also been increased. If banking reform continued in the same way, the NPA levels in government banks will come in the control level in the coming days.
DEC 31 (WTN) – This is the result of the Modi government's efforts is that there has been a sharp reduction in the bad loans of government banks and the banks have mostly identified the stressed assets. According to the information, gross non-performing assets (NPAs) of public sector banks are decreasing after reaching their highest level in March. For your information, let you know that in the first half of fiscal year 2019, there has been a decrease of Rs 23,860 crore, which is a remarkable feat in itself.
According to information received from the media, the work of identifying bad loans and showing them in balance sheet is almost completed. Restructured Standard Assets had fallen from the highest level of 7 per cent in March 2017 to 0.59 per cent from September 2018.
According to the data released by the Finance Ministry, the loan accounts which have been delayed by 31 to 90 days and those have not yet converted into NPAs, and these with significantly decreasing in last five quarters, have reached up to 61 per cent at the label of 0.87 lakh crore in September 2018. In June 2017, such NPA was worth 2.25 lakh crores. It is evident that now the new bad loans are becoming very low.
For your information, let you know that in the first half of this financial year, the government banks have recovered recorded Rs 60,726 crore, and this recovery is twice recovered in the same quarter one year ago. According to the information, the Provision Coverage Ratio (PCR) of banks was 46.04 per cent in March 2015, which increased to 66.85 per cent by September 2018. This means that there has been an increase in the ability of banks to 'bear the loss'.
During these times, the government is investing more money in public sector banks. The Center believes that at least two or three banks will come out form the Reserve Protection Bank's Prompt Corrective Action (PCA) framework before this fiscal year ends. For your information, let you know that Finance Minister Arun Jaitley has already cleared about investing in public sector banks and it is said that 41 thousand crore rupees will be given to some public sector banks.
By doing so, the amount levied in the government banks by the central will increase from Rs 65,000 crores to Rs 1.06 lakh crores. In this matter, Finance Minister Arun Jaitley says that this will increase the ability of government banks to let the loan and they will also be able to come out of the Reserve Bank's PCA i.e. Prompt Corrective Action Framework.
For your information, let you know that in the PCA those banks are inserted which can’t follow certain standards. Prompt Corrective Action means that after inserting in PCA framework, banks aren’t allowed to lend loans and open new branches.
The way the government's gross non-performing assets (NPAs) have decreased by Rs 23,860 crore in March, it is worth the praise. The way the Modi government is constantly working for banking reform, it is clear that gradually after the demonetization the Indian banking system is getting on track and its ability to bear financial loss has also been increased. If banking reform continued in the same way, the NPA levels in government banks will come in the control level in the coming days.
