Gross non-performing assets of regular commercial banks declined
Ministry of Finance
Gross non-performing assets of regular commercial banks declined
Posted on: Feb 07, 2022 8:37 PM by GDP Delhi
According to the Reserve Bank of India (RBI) Global Operations data, the Gross Non-Performing Assets (GNPA) of Regular Commercial Banks (SCBs) have decreased from Rs. 9,33,779 crore (GNPA ratio of 9.07%) as of 31.3.2019 to Rs. 8,00,463 crore (GNPA ratio of 6.93%) as of 30.9.2021. This was stated by the Union Minister of State for Finance, Dr Bhagwat Kisanrao Karad in a written response to a question in Lok Sabha today.
Further, the Minister said that the GNPA of Deposits-NBFC and Non-Deposits Systemically Important-NBFC were Rs. 1,91,413 crores (GNPA ratio of 6.87%) as of 30.9.2021.
Giving further details, the Minister said that according to RBI data, the GNPAs of Public Sector Banks (PSBs) as a proportion of those of SCBs decreased from 79.2% as of 31.3.2019 to 75.7% at 31.3.2020 to 73.8% at 31.3.2020. at 31.3.2021 and then to 72.3% at 30.9.2021, while the NBI of Private Sector Banks (PVB) as a proportion of those of SCBs increased from 19.4% at 31.3.2019 to 23.0% at 31.3.2020 to 24.2% at 31.3.2021 and then to 24.9% at 30.9.2021.
On the issue of the various remedial measures taken by the government and the RBI, the Minister said that several initiatives have been taken to increase credit penetration in the economy including the following –
- 44.51 crore accounts opened under Pradhanmantri Jan Dhan Yojana(PMJDY), a scheme with a National Mission for Financial Inclusion to provide access to financial services, namely, basic savings and deposit account, remittance, credit, insurance, affordable pension;
- Limit overdraft facility up to Rs. 10,000 extended to eligible PMJDY account holders;
- PM Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi) program launched by the government to help poor street vendors, affected by the COVID-19 pandemic, resume their livelihood activities has enabled 32.69 lakh street vendors to access credit amounting to Rs. 3,364 crores till 31.1.2022;
- Operationalizing improved access to credit under the self-employment program Deendayal Antyodaya Yojana-National Rural Livelihoods Mission (DAY-NRLM) and Deendayal Antyodaya Yojana-National Urban Livelihoods Mission (DAY-NULM), under which 78, 66,199 and 16,63,704 beneficiaries, respectively, have benefited from credit facilities over the past three years;
- Bank credit to non-banking financial institutions (NBFCs) other than NBFCs-micro-finance institutions (MFIs) for on-lending to agriculture, micro and small enterprises and housing has been made eligible to be classified as a priority sector;
Digitization of loans to increase the reach of institutional credit;
- Digital loan initiation has been made contactless through PSBloansin59minutes.comto provide online approval in principle of loans to micro, small and medium enterprises (MSMEs), home loans, personal loans and car loans to individuals;
- Online bill discounting for MSMEs has been enabled on a competitive basis through the integration of Public Sector Banks (BSP) on the Trade Receivables Discounting System (TReDS) platform;
- End-to-end automated digital lending has been introduced in large PSOs for unsecured personal loans (in five PSOs), micro-enterprise loans (“Shishu Mudra”, in five PSOs) and MSME loan renewals (in three PSOs);
- Customer-focused, analytics-based credit offerings received a boost, resulting in Rs. 49,777 crore in new personal loan disbursements by the seven largest PSOs in the financial year 2020-2021; and
- Establishment of loan management systems and centralized processing centers in public sector banks (PSBs) to improve execution time (TAT).
- A specific target of 10% Adjusted Net Bank Credit (ANBC) for small and marginal farmers has been set for all commercial banks, to be implemented gradually over a four-year period between 2020 and 2021 to facilitate the flow of credit from small farmers. and marginal farmers;
- Credit awareness program launched by the government on 16.10.2021 to make loans available to eligible borrowers, through special camps across the country by banks under which a total loan amount of Rs. 94,063 crores were sanctioned until 26.11.2021, according to bank data; and
- To ensure availability of agricultural credit at reasonable cost/reduced rate, interest subsidy scheme (2%) for short term agricultural loans up to Rs. 3 lakh is being implemented by public sector banks and private sector banks (reimbursement by RBI), regional rural banks and cooperative banks (reimbursement by NABARD).
The Minister further stated that several measures have been taken to promote regular repayment and prevent these loan accounts from turning into Non-Performing Assets (NPA), which include but are not limited to the following –
- instituting the use of third-party data sources in PSBs for full due diligence between data sources at the sanction stage itself, to mitigate the risks of misrepresentation and fraud;
- classification of accounts as Special Mentioned Accounts (SMA) for early detection of signs of incipient stress leading to failure to timely service debt obligations, allowing banks to take timely corrective action to avoid their potential shifts in NPAs;
- implementation of comprehensive and automated early warning systems (EWS) in banks, with approximately 80 EWS triggers, using third-party data and workflow for time-limited corrective actions, to proactively detect the stress and reduce slippage in NPAs;
- encourage regular repayment by linking eligibility for the next working capital loan cycle to a hardened limit with on-time or early repayment of the existing loan under the PM SVANidhi program; and
- repayment behavior of borrowers in their loan accounts is reported to credit information companies (CICs), and banks include this information in the credit assessment and decision-making process for subsequent loan sanctioning to borrowers.
According to RBI entries, bank inspection reports are disclosed by the RBI, under the Right to Information (RTI) Act 2005, after completion of the oversight process regarding the inspection report. inspection of the specific year in accordance with the procedures set out in Section 11 and other relevant provisions of the RTI Act 2005, said the Minister.
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Republic of India Ministry of Finance published this content on February 07, 2022 and is solely responsible for the information contained therein. Distributed by publicunedited and unmodified, on Feb 07 2022 15:19:10 UTC.
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