Govt fails to check NPAs, says panel



A Parliamentary committee has observed that none of the measures taken by the RBI and the government have been able to contain the problems of bad loans in the banks.

The committee also finds that NPAs have attained a “frankensteinian proportion” and asked the government to plug loopholes in these instruments and report it back.

“The committee take note of the various measures initiated by the RBI to facilitate the public sector banks (PSBs) deal with the problem of growing NPAs, such as flexible restructuring for long term project loans, debt restructuring scheme, scheme for sustainable structuring of stressed assets and sale of NPAs to the Asset Reconstruction Companies,” the Lok Sabha Committee on Petitions said in its latest report.

“However, the committee have also noticed that all these instruments/schemes have not been able to contain the problem of NPAs which has now attained frankensteinian proportion. The committee, therefore, strongly recommends that the Ministry of Finance in coordination with RBI should undertake objective analysis and evaluation of the effectiveness of these schemes.”

It also urged the Centre to take necessary actions and plug the loopholes in the schemes and get back to the committee.

The committee said that in the period of three years since March 2013, the gross NPAs of public sector banks and scheduled commercial banks rose to 205% and 194% respectively.

In March 2013, the gross NPAs of PSBs were Rs 1,55,890 crore, which galloped to an alarming level of Rs 4,76,816 crore in March 2016.

Similarly, the scheduled commercial banks’ NPAs shot to Rs 5,41,763 crore in March 2016, from Rs 1,83,854 crore in March 2013, the report cited requiring urgent action from the government.

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