RBI may hike NPA provision ratio if needed: K C Chakrabarty

The RBI Deputy Governor said the "change in the administration" has to come in a slew of areas which would be internal as well as external.

Lending rates would have been far lower if banks had got their NPAs down, Chakrabarty said.

"It is a burden on the people who are paying the money. People forget that if NPAs would have been 1 per cent, banks' lending rates would have been 4 per cent lower with the same inflation, and same repo rate.

"That's why we should tackle NPAs -- not only for the survival of the system, but also for the survival of the customer," Chakrabarty said.

According to RBI data, the gross NPA ratios of the public sector banks stood at 3.3 per cent for the fiscal ended March 2012, up from 2.4 per cent a year ago, while the same for private lenders dropped to 2.1 per cent from 2.5 per cent.

A recent report by rating agency Icra warned the bad assets book of banks are set to cross Rs 2 lakh crore mark, or about 3.8 per cent of the total asset book, this fiscal.

Similarly, the report said the uncovered NPAs or net NPAs, despite the higher credit provisioning, increased from 1.1 per cent at end March 2011 to 1.5 per cent at end June 2012.

This led to an increase in net NPAs in relation to net worth from 10.5 per cent at the end of March 2011 to 14.4 per cent at the end

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