Virendra Pandit
New Delhi: The Non-performing assets (NPAs) have declined by Rs 61,180 crore to Rs 8.34 lakh crore at the end of March 31, 2021, because of various steps taken by the Centre, Union Minister of State for Finance Bhagwat K Karad said on Monday.
Scheduled commercial banks (SCBs) were burdened with NPAs worth Rs 8.96 lakh crore on their balance sheet at the end of March 2020.
“Primarily as a result of transparent recognition of stressed assets as NPAs, gross NPAs of SCBs, as per the RBI data on global operations, rose from Rs 3,23,464 crore as on 31.3.2015, to Rs 10,36,187 crore on 31.3.2018. As a result of the government’s strategy of recognition, resolution, recapitalization and reforms, these have since declined to Rs 9,33,779 crore on 31.3.2019, Rs. 8,96,082 crore as on 31.3.2020, and further to Rs 8,34,902 crore (provisional data) as on 31.3.2021,” he said in a written reply to the Lok Sabha.
Karad said the Covid-19 Regulatory Package announced by the RBI permitted lending institutions to grant a moratorium of six months on payment of all installments falling due between March 1 and August 31, 2020, in respect of all term loans and to defer the recovery of interest for the same period in respect of working capital facilities.
Replying to another question, the minister said that gross NPAs of public sector banks (PSBs) peaked at Rs 8,95,601 crore on March 31, 2018.
The NPAs have since declined to Rs 7,39,541 crore on March 31, 2019, Rs 6,78,317 crore on March 31, 2020 and further to Rs 6,16,616 crore as on March 31, 2021 (provisional data).
“The net NPAs have displayed a similar trend, increasing initially from Rs 1,24,095 crore on 31.3.2014 to Rs 2,14,549 crore on 31.3.2015, Rs 3,24,372 crore on 31.3.2016, Rs 3,82,087 crore on 31.3.2017 and peaking at Rs 4,54,221 on 31.3.2018. They declined thereafter to Rs 2,84,689 crore on 31.3.2019, Rs 2,31,551 crore on 31.3.2020 and further to Rs 1,97,360 crore as on 31.3.2021 (provisional data),” he said.
Throughout this period, Karad said, PSBs continued to post aggregate operating profits 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 financial year 2015-16, 2016-17, 2017-18, 2018-19 and 2019-20 respectively.
“However, primarily due to continuing aging provision for NPAs, they made aggregate provision for NPAs and other contingencies of Rs 1,55,226 crore, Rs 1,70,371 crore, Rs 2,40,956 crore, Rs 2,17,481 crore, and Rs 2,00,404 crore respectively in the said years, resulting in aggregate net losses of Rs 17,993 crore, Rs 11,389 crore, Rs 85,370 crore, Rs 66,636 crore, and Rs 25,941 crore respectively and returning to profitability thereafter with an aggregate net profit of Rs 31,820 crore in FY2020-21,” he said.
Simultaneously, comprehensive steps were taken to control and to effect recovery in NPAs, which enabled the PSBs to recover Rs 5,01,479 crore over the last six financial years, he added.
Replying to another question, he said, the overall credit growth of the SCBs remained positive for 2020-21 despite the contraction in GDP (-7.3 percent) due to the pandemic.
‘Gross Loans and Advances Outstanding’ of SCBs increased from Rs 109.19 lakh crore as of March 31, 2020, to Rs 113.99 lakh crore as of March 31, 2021, he said.
Also, Karad said, as per the RBI data of loans to agriculture and allied activities, micro, small and medium enterprises (MSMEs), housing, and vehicle have witnessed a year-on-year growth of 12.3 percent, 8.5 percent, 9.1 percent, and 9.5 percent respectively during the year.
The ability of PSBs to further increase lending is evident through the Capital to Risk-Weighted Assets Ratio which stood at 14.04 percent as of March 31, 2021, as against the regulatory requirement of 10.875 percent, he added.