RBI asks banks to improve NPA management

The Reserve Bank today asked banks to improve their ability to manage stressed assets, but said there was nothing alarming about an unexpected rise in the NPA levels this fiscal.

"Concerns (on NPA) are there. Banks have to improve their ability to manage NPAs. We have told banks what is their lacuna. They have to improve their information system. But we see that the situation is not alarming. Though this is our concern. Hope banks will be able to manage them," deputy governor K C Chakrawarthi  told reporters on the sidelines of a function organised by YES bank here.

It can be noted that following the continued slowdown in economic activities on the back of rising interest rate regime, banks, especially the state-run ones, have been reporting higher NPAs in their books since the second quarter.

The country's largest lender SBI had reported record gross NPAs in Q3 at Rs 40,080 crore and saw an 87.5 per cent spike in its provisioning. But private lenders are better off.

The total NPAs in the system are set to top 3 per cent of the total assets this fiscal, against a 2.3 per cent last fiscal at Rs 98,000 crore. 

Posted By- Nitesh Kumar Singh
PGDM 2nd sem