PSU banks’ NPAs likely to be a little higher in 2014: Chidambaram

PSU banks’ NPAs likely to be a little higher in 2014: Chidambaram

Public sector banks' non-performing assets (NPAs) or bad loans could rise further in 2014, Union Finance Minister P. Chidambaram said following a performance review meeting with PSU banks and financial institutions on Wednesday.

Mr. Chidambaram said PSU banks' NPAs, which at the end of March 2013 were at 3.84 per cent, would likely be a little higher in 2014. However, he added that NPA levels should be looked only at the end of a year as figures collected at the starting of the year could depict a very misleading picture.

Speaking to reporters, he said, "(PSU banks') NPAs at the end of March 2013 are 3.84(%). So we have to wait and watch and see what it will be for March 2014. It is likely to be a little higher. NPA levels should be looked only at the end of the year. At the beginning of the year, they can give you a very misleading picture."

He also refused to detail PSU bank's NPA figures for the first three quarters of the current financial year, saying the figures could be misleading.

However, he disclosed that PSU banks had recovered Rs 189.3 billion worth of bad loans during the first three quarters of this financial year, and that these banks had further upgraded accounts worth Rs 219.8 billion. United Bank of India (UBI) recovered bad loans of Rs 4 billion and upgraded bad loans of Rs 8 billion in the past two months. The Finance Minister added that the government was monitoring the top thirty NPA accounts in the banking system.

The NPAs in the banking system have swelled from Rs 68,220 crore in FY2008-09 to Rs 194,000 crore in FY2012-13. Of this, PSU banks alone accounts for Rs 162,000 crore.

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