He said while the previous UPA government hid the bad loans, his government has properly recognised them and brought tough laws to deal with defaults and recovery money.
'We started affordable housing loans that has good traction and the books have grown to Rs 750 crore as of the end of last quarter.'
Former RBI governors Urjit Patel and Raghuram Rajan have also expressed worry about the Mudra scheme, particularly government's target-setting practice and the rising bad loans.
Wilful defaulters owe SBI Rs 80,000 crore. 10 nationalised banks are owed another Rs 1.5 trillion.
The country's biggest bank SBI on Friday posted over two-fold jump in standalone net profit at Rs 16,884 crore for the first quarter of the current financial year, helped by decline in bad loans and improvement in interest income. State Bank of India (SBI) had reported a net profit of Rs 6,068 crore in the April-June quarter of 2022-23. The bank's total income increased to Rs 1,08,039 crore in the first quarter of 2023-24, as against Rs 74,989 crore in the same period a year ago, as per the regulatory filing.
Apart from easing the NPA pressure on domestic banks, the RBI's move can allow companies to raise cheap, long-term loans easily now.
Vijaya Bank assured employees that the service conditions 'will remain unaffected and staff benefits retained'
'As long as economic growth remains steady, creating jobs and generating stable incomes, the rise in home loans should not create problems.' 'If the growth trajectory changes course over the medium term and interest rates rise along with inflation, the expanding trend in home loans may not sustain.'
The Centre should privatise all public sector banks (PSBs), except the State Bank of India (SBI). This is because private banks have emerged as a credible alternative to PSBs with substantial market share. Also, government ownership hinders the ability of the Reserve Bank of India (RBI) to regulate the sector, according to a report by the National Council of Applied Economic Research (NCAER).
The bank's overall exposure to the 40 select accounts referred by the Reserve Bank to be resolved under bankruptcy laws is Rs 15,229 crore
About 50 per cent of the accounts that availed of the EMI moratorium amid the pandemic, which made things worse in an already slowing economy, are expected to be restructured, and of these accounts that would undergo restructuring, one-third, or Rs 6-9 trillion, could turn into NPAs.
The Cabinet on Wednesday gave in-principle approval for strategic disinvestment along with transfer of management control in IDBI Bank in line with the Budget announcement earlier this year. The central government and LIC together own more than 94 per cent equity of IDBI Bank. LIC, currently the promoter of IDBI Bank with management control, has a 49.21 per cent stake. The Cabinet Committee on Economic Affairs chaired by Prime Minister Narendra Modi approved the strategic sale of IDBI Bank, an official statement said on Wednesday.
Question remains, what happens when the overseeing committees' members themselves are questioned by investigative agencies?
'The RBI's clarification on non-performing advances accounting is likely to increase NPAs by around one-third for non-banking finance companies,' domestic rating agency India Ratings and Research said in a report on Friday.
Ambani's group companies are stated to have taken loans of about Rs 12,800 crore from the bank that turned NPAs.
However, financial flows to the economy remained constrained because of decline in the amount of equity finance raised from the capital markets and stress in the NBFC sector, Finance Minister Nirmala Sitharaman pointed out.
'Our unsecured loan is not exactly unsecured. It is backed by cash flow of customers.'
The decision in this regard, however, is expected to be taken by the new government.
As many as 26 premises are being searched in these cities by the federal agency under the criminal sections of the Prevention of Money Laundering Act, they said.
'With NPA under control, we should be able to post better profits.'
NPA problem to continue for next 2-3 quarters: banks to FinMin
While banks are not as exposed as the corporate sector during the initial stage of the pandemic, the strain on lenders could ultimately be profound. Banks face a second-order hit compared with the corporate and household sectors.
The Enforcement Directorate on Wednesday said it has attached in London, Dubai and India assets worth Rs 538 crore of Jet Airways founder Naresh Goyal, his family members and companies as part of a money laundering investigation linked to an alleged bank loan fraud. The attached properties include 17 residential flats, bungalows and commercial premises. Located in London, Dubai and various cities in India, these properties are in the name of various companies like Jetair Private Limited and Jet Enterprises Private Limited, Goyal, his wife Anita, and son Nivaan, the central agency said in a statement.
Banks will also consider requests from MSMEs for restructuring their stressed standard assets. So far, only 25 per cent of the around 1 million eligible MSMEs have taken benefit of the RBI's special dispensation.
The NCLAT said the RBI cannot restrict it from prohibiting banks from 'asset classfication' and observed that any change in this order would upset the entire resolution process of the IL&FS
The bi-annual financial stability report noted that failure of an NBFC with the maximum capacity to cause solvency losses to the banking system will lead to a loss of 2.5 per cent of the total tier-I capital of the banking system.
In addition to challenges such as reining in non-performing assets (NPAs) and boosting profits, Chaudhry will have to repair the bank's reputation, build internal controls, and improve regulatory relations.
ICICI Bank was the top gainer in the Sensex pack, rising over 3 per cent, followed by ITC, SBI, HCL Tech, Axis Bank, Bajaj Finserv and Tech Mahindra. NSE Nifty advanced 32 points to 15,856.05.
New norms are in place to strengthen regulations for this set of lenders which has been playing a critical role in Asia's third largest economy, notes Tamal Bandyopadhyay.
'We have a plan to plough back a 'This year in the first half we had profits of more than Rs 31,000 crore.' significant amount of profits this financial year.' 'We have seen this organic plough back of profit is one of best ways to support the equity of the bank.'
A strong performance by sectors including banking raised the profits of Indian companies by 28 per cent in the three months ended March 2022. The rate of growth is, however, lower than the 30 per cent seen in December. Growth in net sales was also lower than what was seen in the December quarter for the sample under consideration.
Housing finance company (HFC) PNB Housing is planning to focus on reducing delinquencies in 2023-24.
The three options are - a one-time settlement, restructuring of loans and of course go to IBC.
The measures to reduce the current account deficit should have focused far more on narrowing the trade imbalance, principally through export facilitation and linked FDI, says Nitin Desai.
'These are only passing clouds. The banking industry is a century-old industry and this is not the first time it is going through such a crisis.' 'When the economy revives, those companies that are in the infrastructure fields will also get revived.' 'After all, a lot of money has gone into creating assets like power projects and roads, so you can't say money has been wasted.'
Banks' gross non-performing assets (NPAs) and net NPAs are expected to rise to 10.1-10.6 per cent and 3.1-3.2 per cent, respectively by March 2021, Icra said on Monday. The agency also expects net NPA to decline to 2.4-2.6 per cent by March 2022. "As moratorium on loan repayments is over and though we await the Honourable Supreme Court directive on asset classification, the GNPAs and NNPAs for banks are likely to rise in near term to 10.1-10.6 per cent and 3.1-3.2 per cent, respectively by March 2021 from 7.9 per cent and 2.2 per cent, respectively as of September 2020," the rating agency said in a report.
It has Rs 20,500 crore of standard stressed pool outstanding as of June 2018. Thus, the entire stressed book (net NPAs and standard stressed pool) is nearly two times its net worth.
The country's largest lender SBI on Saturday reported a 9.13 per cent rise in consolidated net profit to Rs 16,099.58 crore for the September quarter, weighed down by money it had to set aside for employees' impending wage and pension revisions. On a standalone basis, the State Bank of India (SBI) had a 8.03 per cent increase in the profit after tax for the reporting quarter at Rs 14,330 crore. However, the same was down 15.13 per cent compared to Rs 16,884 crore in the June quarter.
Factors like dedicated recovery teams, centralised follow-up on bad loan accounts and resolutions via NCLT are driving the trend
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