SBI Q4 profit jumps 80 pc to Rs 6,451 crore as bad loans situation improves
Business | May 21, 2021 17:25 ISTSBI had earned a profit of Rs 3,580.81 crore during the January-March period of 2019-20, the lender said in a regulatory filing.
SBI had earned a profit of Rs 3,580.81 crore during the January-March period of 2019-20, the lender said in a regulatory filing.
Congress leader Rahul Gandhi on Monday raised in Lok Sabha the issue of bad loans and sought a list of 50 top wilful defaulters.
In a written reply in the Lok Sabha, Finance Minister Arun Jaitley said that stringent action including dismissal, compulsory retirement and demotion, was taken against these officials in connection with the bad loans.
Bank of Baroda also had NPAs to the tune of Rs 46,454 crore, Canara Bank Rs 41,907 crore, Central Bank of India Rs 37,411 crore, Indian Overseas Bank Rs 35,607 crore and UCO Bank Rs 28,822 crore.
As many as seven cases were resolved through the National Company Law Tribunal (NCLT) and payment has been received in Bhushan Steel, Basai Steel & Power Limited and Monnet Ispat cases, he said.
IDBI Bank’s gross NPA soared to 27.95% of its loans at March 2018-end compared to 21.25% at the end of March 2017. Similarly, the net NPAs were 16.69% compared to 13.21%.
Total income during the January-March quarter was up at Rs 68,436.06 crore, from Rs 57,720.07 crore in the same period a year earlier.
The gross non-performing assets (NPAs) of all the banks in the country amounted to Rs 8.41 lakh crore at end-December, bulk of which is in the books of public sector banks (PSBs).
"I think that through recapitalisation and other measures, we really need to ensure that the banking system gets strong enough to be able to begin the process of lending."
Banks are already bleeding due to the systemic clean-up of their books undertaken by RBI over the past three years and the newer accounting system may only aggravate the pains.
The report states that the new framework has the potential to bring about a big change in the approach of banks to monitor their exposures and resolution of non-performing assets (NPAs).
Worse may not be over for the banking sector. As the bad loans are on a steady rise, new RBI guidelines are expected to add over Rs 2.8 trillion worth of loans in NPA category.
The Central bank also abolished half a dozen existing loan-restructuring mechanisms.
Financial Services Secretary Rajiv Kumar said the RBI's new rules are a "wake up call" for defaulters.
Among other things, the RBI has decided to do away with the Joint Lenders’ Forum (JLF) as an institutional mechanism for resolution of stressed accounts also stands discontinued.
Jaitley said that it was reckless lending by banks during the boom years in the previous government that had led to accumulation of such huge NPAs in the banking system.
Jaitley was replying to the debate in the Lok Sabha on Friday after it passed the amendments to the Insolvency and Bankruptcy Code (IBC) which seek to plug potential loopholes in the Code.
Congress spokesperson Randeep Singh Surjewala said that Prime Minister Narendra Modi’s charge that banks were forced to give loans to select industrialists during UPA rule are baseless.
The lenders have also sought RBI's permission to extend the December 13 deadline for Videocon Industries, where they have huge exposure, said another banker.
Speaking at the 90th AGM of industry association FICCI, Modi said that the non-performing asset (NPA) or bad loans problem is a "liability" handed over by "economists" in the previous regime.
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