Banks’ bad loans down at 9.34 lakh crore at FY19-end

  1. Finance minister has informed the Parliament that Gross non performing assets(NPA) of scheduled commercial banks has declined by Rs 1.02 lakh crore to Rs 9.34 lakh crore in 2018-19.
  2. Non-performing assets(NPA) is a loan or advance for which the principal or interest payment remained overdue for a period of 90 days.
  3. The decline in number of bad loans is a result of government’s 4Rs strategy which is recognition,resolution,recapitalisation and reforms.
  4. The other measures taken the government includes (a)directions to banks to examine all NPA accounts above Rs 50 crore from the angle of possible fraud (b)enactment of Fugitive Economic Offenders Act 2018 (c)creation of Central Fraud Registry (d)empowering heads of Public Sector Banks to request for issue of Look Out Circular.
  5. The minister also informed that other steps under the banking reform process such as a board-approved loan policies in public sector banks, and use of third party data sources for comprehensive due diligence across data sources have been put in place to check frauds.
  6. Further,strict monitoring in cases of high-value loans,deployment of specialised monitoring agencies for loans above Rs 250 crore have been set up to ensure timely and better realisation of settlements.