Showing poor management of public sector banks to tackle the NPA issue, PSU banks accounted for over 90 percent of total non-performing assets (NPAs) that the banking sector registered during 2013-14. Out of Rs 2.40 lakh crore gross NPAs reported by Indian banking system in 2013-14, Rs 2.16 lakh crore gross NPAs came from the public sector banks, Finance Minister Arun Jaitley informed the parliament. On the other hand, private sector banks had gross NPAs of Rs 22,738 crore as of March 31, 2014.
Till September 30 of the current fiscal, gross NPAs or bad loans of public and private sector banks stood at Rs 2.41 lakh crore and 26,571 crore respectively. During 2012-13 and 2011-12, the combined gross NPAs of public and private sector banks were at Rs 1.76 lakh crore and Rs 1.31 lakh crore respectively.
Concerned over the increasing NPA of public sector banks, the government has advised PSBs to constitute a board level committee for monitoring of NPAs and recovery, appointment of nodal officers for recovery at the head office. It has instructed Public Sector Banks (PSBs) that write-offs should not be more than recovery. Further, the RBI has also issued instructions to banks to review slippages in asset classification in the borrowal accounts with outstanding Rs 5 crore and review NPA accounts which have registered recoveries of Rs 1 crore and above.