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‘Bad loan situation not alarming; banks can tackle it’

Bank Board Bureau chief Vinod Rai says NPA situation has not reached an alarming level yet

Policy Pulse
Publish Date: May 14 2016 2:49PM | Updated Date: May 14 2016 2:55PM

‘Bad loan situation not alarming; banks can tackle it’
Emphasising that the bad loan situation is not alarming, Banks Board Bureau chief Vinod Rai said all public-sector banks have got their strategies in place to tackle the stressed asset woes.
"All of them are suffering from stressed assets. They are across infrastructure sectors. But each bank has a strategy to resolve which would be different from every other bank. That is what we discussed," he said after a day-long meeting with heads of PSU banks.
Asked if the NPA situation of banks has reached an alarming level, he said, "it is not and banks will come out of this".
Gross NPAs of PSBs rose from Rs 2,67,065 lakh crore in March 2015 to Rs 3,61,731 lakh crore in December 2015.
Asked if the PSU banks would need more than Rs 25,000 crore capital infusion budgeted for the current fiscal, Rai said, it will be decided only after the banks declare their fourth quarter results.
"The results are being declared now, the audit is going on. Only after that the government will take a view on how much is to be infused," he said.
On consolidation, Rai said all those issues are secondary and no such proposal has come.
"Just now it is the question of trying to resolve the assets and trying to ensure any vacancies which exist get filled up so we are working towards that. Consolidation and all that is being discussed. It is work in progress," he said.
With regard to stake sale in IDBI Bank, he said, it could happen in less than six months but this issue is not looked at by the BBB.
The government in December gave approval to IDBI Bank for raising Rs 3,771 crore during the year, by way of Qualified Institutional Placement (QIP), a move which will dilute its holding by about 26% in the lender.
The government's holding in the bank stands at 80.16%.
With regard to credit push, he said, each bank has created a strategy on how they will address their lending issues.