Rising bad loans are a major concern for the Reserve Bank.
Central Bank of India 21.5 percent tops the list of public sector banks with maximum bad loans including restructured assets as a percentage of total advances. The other banks which have significant amount of gross NPAs and restructured loans include, United Bank of India (19.04 per cent), Punjab & Sind Bank (18.25 per cent) and Punjab National Bank with 17.85 percent.
Indian Overseas Bank, State Bank of Patiala, Allahabad Bank and Oriental Bank of Commerce all have bad and restructured loans in excess of 15 per cent.
Infact just four public sector banks — Vijaya Bank, State Bank of Travancore, Canara Bank, Syndicate Bank have gross NPA level less than 5 percent and 13 banks have a gross NPA of more than 5 percent.
Non-performing assets, also called non-performing loans, are loans with three successive defaults on repayments of principal or interest of instalments.
Non-performing asset (NPA) do not just reflect badly in a bank’s account books, they adversely impact the national economy.
State Bank of India (SBI) is in the process of putting in place a system of early warning signals to monitor performing of standard assets showing early signs of stress. Early Warning System (EWS) is a solution to identify borrowers in the bank’s portfolio showing early signs of stress and enable timely corrective action planning. Each account is monitored across a set of automated triggers to identify the riskiness of the account.
The SBI has tied up with the BPOs for making pro-active calls to stressed accounts in retail and real estate segment of Business Process Re-engineering (BPR) centre branches.
This was stated by the Ministry of Finance in written reply to a question in Rajya Sabha.