NPA also refers to non performing administration: K C Chakrabarty-Business Standard 09.05.2014
Rising NPAs has been of major concerns for banking industry
Former Reserve Bank of India Deputy Governor, K C Chakrabarty today said rise in Non Performing Assets (NPA) or bad loan in the banking system is also due to non performing administration.
“The issue of NPAs is due to Non Performing Administration. Discipline is required for everybody, even bankers and borrowers also. If we don’t resolve the issue of NPA quickly then it will be a big problem. Action should be taken against borrowers who do not cooperate” said Chakrabarty.
Rising NPAs has been of the major concerns for the banking industry. In its financial stability report released last December,RBI said the stressed assets -- which includes NPAs and the restructured assets -- have touched 10.2%, including 4.2% in GNPAs (gross non performing assets).
In the financial stability report, RBI has projected the GNPAs to move up to 4.6% by September 2014, and then improve to 4.4% by March 2015.
According to RBI data net NPA of public sector banks rose to 2.02% during 2012-13 compared to 1.53% in the previous year while net NPAs of private sector banks rose marginally to 0.45% as compared to 0.42% in the previous fiscal year.
“The issue of NPAs is due to Non Performing Administration. Discipline is required for everybody, even bankers and borrowers also. If we don’t resolve the issue of NPA quickly then it will be a big problem. Action should be taken against borrowers who do not cooperate” said Chakrabarty.
Rising NPAs has been of the major concerns for the banking industry. In its financial stability report released last December,RBI said the stressed assets -- which includes NPAs and the restructured assets -- have touched 10.2%, including 4.2% in GNPAs (gross non performing assets).
In the financial stability report, RBI has projected the GNPAs to move up to 4.6% by September 2014, and then improve to 4.4% by March 2015.
According to RBI data net NPA of public sector banks rose to 2.02% during 2012-13 compared to 1.53% in the previous year while net NPAs of private sector banks rose marginally to 0.45% as compared to 0.42% in the previous fiscal year.
Govt calls govt bank chiefs for performance review on May 13
This will be the last performance review of PSBs under Congress-led the United Progressive alliance II government
The finance ministry has called a meeting of the chiefs of public-sector banks (PSB) and financial institutions to review their performance in FY14 on May 13 - just three days before the counting of votes for the Lok Sabha elections.
( No Moral now to guide bankers )
This will be the last performance review of PSBs under the Congress-led the United Progressive Alliance government. Many large public-sector banks including State bank of India,Punjab National Bank and Bank of India, are yet to declare results. Notably, Bank of Baroda is slated to announce results on May 13.(This is farewell message )
A few state-owned banks such as IDBI Bank, Union Bank,Indian Overseas Bank have announced results for FY14.
Two PSB chiefs defended finance minister P Chidambaram’s decision to call the meeting saying even though the election process is underway, the government is well within its rights to conduct a performance review.( PC has not cared for Bank staff wage hike as because he is likely to go )
Banks had given certain indicative targets and it is natural to see where they stand at the end of March 2014. The chief executive of a south India-based public-sector bank said the finance minister is reviewing the performance of banks on many areas including financial inclusion and non-performing assets (NPAs).
At the time of the last review held in March 2014 for the third quarter ended December 2013, the government had flagged concern over the decline in profitability and return on assets (ROA).
Public-sector banks have been hit hard by the rising NPAs, a slump in credit demand due to slowdown and higher burden for provisions for NPAs and restructured loans.
Banks were earlier made to work overtime to create infrastructure for direct benefit transfer (DBT) scheme to deposit subsidies and other cash benefits in the bank accounts of beneficiaries. This was meant to bring people into the fold of financial services.
The decline in profitability and ROA was noted with concern. The strain on capital adequacy has become a matter of concern as PSBs are faced with the burden of NPA provisions and provisions for employee benefits.
In March 2014, Chidambaram had told bank chiefs that the government’s capacity to provide capital for PSBs was not unlimited and to remain adequately capitalised, they have to increase retained earnings and expedite recovery.
This will be the last performance review of PSBs under the Congress-led the United Progressive Alliance government. Many large public-sector banks including State bank of India,Punjab National Bank and Bank of India, are yet to declare results. Notably, Bank of Baroda is slated to announce results on May 13.(This is farewell message )
A few state-owned banks such as IDBI Bank, Union Bank,Indian Overseas Bank have announced results for FY14.
Two PSB chiefs defended finance minister P Chidambaram’s decision to call the meeting saying even though the election process is underway, the government is well within its rights to conduct a performance review.( PC has not cared for Bank staff wage hike as because he is likely to go )
Banks had given certain indicative targets and it is natural to see where they stand at the end of March 2014. The chief executive of a south India-based public-sector bank said the finance minister is reviewing the performance of banks on many areas including financial inclusion and non-performing assets (NPAs).
At the time of the last review held in March 2014 for the third quarter ended December 2013, the government had flagged concern over the decline in profitability and return on assets (ROA).
Public-sector banks have been hit hard by the rising NPAs, a slump in credit demand due to slowdown and higher burden for provisions for NPAs and restructured loans.
Banks were earlier made to work overtime to create infrastructure for direct benefit transfer (DBT) scheme to deposit subsidies and other cash benefits in the bank accounts of beneficiaries. This was meant to bring people into the fold of financial services.
The decline in profitability and ROA was noted with concern. The strain on capital adequacy has become a matter of concern as PSBs are faced with the burden of NPA provisions and provisions for employee benefits.
In March 2014, Chidambaram had told bank chiefs that the government’s capacity to provide capital for PSBs was not unlimited and to remain adequately capitalised, they have to increase retained earnings and expedite recovery.
Link Business Standard
'Better corp governance helps private banks limit NPAs' Chakrabarty, who was known for his candid views, described NPAs as a problem emanating from "non-performing administration".
Link Money Control
'Better corp governance helps private banks limit NPAs' Chakrabarty, who was known for his candid views, described NPAs as a problem emanating from "non-performing administration".
Link Money Control
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