Hoping that the NPA situation will improve in the coming quarters, Finance Minister Arun Jaitley on Friday said an all-out effort has been launched to correct the current “unacceptable” level of bad loans in the PSU banks.
“NPAs, which have reached to the present level are unacceptable. They reached this level partly because of indiscretion, partly because of inaction, partly because of challenges in some sectors of the economy, which were evident through the high NPA in these sectors,” he said.
Jaitley was inaugurating 109 new branches and 109 Bunch Note Acceptors (BNA) on the Indian Bank Foundation Day.
Gross Non Performing Assets (NPAs) of public sector unit (PSU) banks at the end of March quarter stood at 5.20 per cent compared with 5.63 per cent in December.
“An all-out effort have been launched to correct the health and bring NPAs down. The effort by the bank administration, the effort by the government to infuse more capital, the effort to get more finance by divesting (government holding), and then greater discretion and more importantly addressing the concerns of each of (stressed) sectors.
“And I don’t have a doubt that over the next few quarters, the banks will be able to address these challenges,” he said.
The Finance Minister said the government’s plan to infuse capital into the PSU banks over the next four years will “infuse lot of financial strength” in these banks to deal with the bad loan problems.