6 Crucial Sectors Contribute To 36% Of Total Bad Loans

Some of the crucial sectors, including infrastructure, chemicals, engineering and mining contribute to 36% of the overall 4.1% bad loans in the Indian banking system, said Reserve Bank of India in its annual report for FY2013-14.

These sectors only have 30% of the total credit share and the public sector banks were the chief sources of stress, the central bank said.

As per the RBI, the gross bad loans in the system went up to 4.1% in FY2013-14 from 3.4% a year ago. The gross NPA ratio for the non-priority sector increased to 4% as in March this year as against 3% in the year-ago period.

“The non-priority sector has contributed more in the deterioration of the loan asset quality of the banking sector in recent years,” it said. The contribution of PSL loans to the total bad loans dipped to 36% in FY2013-14 from 40% in FY2012-13.

It also said the contribution of mandatory priority sector loans to the overall bad assets have come down during the last financial year.