In the three months to December, listed banks have added nearly R1 lakh crore in bad loans prompting the Supreme Court to ask RBI to furnish details of companies that have each defaulted on loans amounting to more than Rs 500 crore within six weeks. Even RBI governor Raghuram Rajan has called for deep surgery instead of applying band aids to tackle rising bad loans.
Gross NPAs of banks in the quarter-ended December rose to 6.5% of the advances from 5.1% in September quarter. The latest numbers are based on 42 listed banks, of which 27 are state-owned, that have declared their results. Stressed assets of public sector banks rose the most — it was 14% of the advances in September quarter as compared to 4.6% for private banks. Five sectors — mining, iron & steel, textiles, infrastructure and aviation, which together constitute 24% of the total advances of banks, contributed 53% of the total stressed assets.