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Each year brings a new plan from the Indian government that is squarely aimed at giving the country’s banks a lifeline as they deal with a <a href="https://www.bloombergquint.com/business/2018/06/26/banks-gross-npas-may-rise-to-over-12-in-fy19-rbi-financial-stability-report">worsening bad loan problem</a>. Last October, it was the initiative to pump ₹2.11 trillion worth of funds into the state-owned banks, the balance sheets of which comprise the major portion of India’s <keyword id="142154" type="PERSON" weightage="20" keywordseo="bad-loans">bad loans</keyword>. The plan has been criticised for not being sufficient to support a growth in lending and mainly helping these banks with their regulatory capital requirements. This year, it’s Sashakt, a scheme for the resolution of assets, as announced by interim Finance Minister Piyush Goyal yesterday. Unlike the recapitalisation plan, this isn’t a bailout and will not require any easing of restrictions from the Reserve Bank of India. It also forgoes the option of <a href="https://www.businessinsider.in/what-is-a-bad-bank-and-how-can-it-fix-indias-bad-loans-problem/articleshow/64541679.cms">establishing a bad bank</a>. The action points for this plan were actually drafted by a government-appointed committee of bankers led by Sunil Mehta, the chairman of the scam-embroiled Punjab National Bank. Here are the main proposals of the scheme:- A national asset management company A national Asset Management Company (<keyword id="6358378" type="ORGANIZATION" weightage="20" keywordseo="amc">AMC</keyword>) will be established to restructure large accounts - those involving sums larger than ₹5 billion. It will be receiving equity capital from foreign private equity firms, alternative investment funds and infrastructure funds. Banks will also be allowed to invest. The AMC will be privately-owned, although the government could take a minority stake in it through an investment fund. Despite the government’s claim that it’s not creating a <keyword id="6605010" type="UNKNOWN" weightage="20" keywordseo="bad-bank">bad bank</keyword>, the asset management company will function like one. It will consolidate all of the bad loans in one vehicle and focus on the liquidation and restructuring of the accounts. However, unlike a bad bank where the loans are simply hived off into a separate vehicle under the aegis of the bank’s parent, the asset management company will have to bid for these accounts in an open auction. Hence, the owner of the stressed account will sell the loan for a price determined by the market and will be paid within two months. AMCs can also bid for assets listed by the National Company Law Tribunal (NCLT), a body mandated by India’s bankruptcy code to deal with large stressed accounts. There could be multiple AMCs created if the need arises, Goyal reportedly said. An additional recommendation involved the creation of a trading platform for stressed assets as well as unstressed accounts. Bank-led solutions for smaller accounts For non-performing accounts that less than ₹500 million, banks will have to set up dedicated units to deal exclusively with the recovery of those accounts and come up with a resolution plan within 3 months of when the account becomes stressed. For accounts in the range of ₹500 million and ₹5 billion, the lead bank has to develop a joint resolution plan with other creditors to the corporate entity within 6 months. The turnaround plan has to be approved by 66% of the creditors to go ahead. In the event that the 6 month-deadline isn’t met or the the creditor vote doesn’t pass, the account will be referred to the NCLT.

India wants to establish a mega-asset manager to tackle its bad loan problem

Mumbai, Union Bank of India on Friday said it has identified eight troubled accounts worth Rs 3,000 crore to be sold to the national <keyword id="6605010" type="General" weightage="20" keywordseo="bad-bank" source="Orion">bad bank</keyword> <keyword id="11291018" type="General" weightage="20" keywordseo="narcl" source="Orion">NARCL</keyword> this fiscal. The lender has more than doubled its net income at Rs 3,236 crore in the June 2023 quarter on improved asset quality and recoveries. The city-based bank had already sold three accounts worth Rs 900 crore last fiscal to the national bad bank at a recovery of 33 per cent. We have sort of identified as many as 42 troubled accounts with an outstanding of Rs 10,000 crore to be sold to the National Asset Reconstruction Company (NARCL). Of these, we hope to sell at least eight of them to that central government-owned bad bank this fiscal, A Manimekhalai, the chief executive and managing director of the public sector lender, told reporters at the bank's post-earnings presser here. Union Bank was one of the first lenders to sell its NPAs to NARCL in the first lot of the bad bank's such transactions. The bank had recovered Rs 20,000 crore from written-offs/upgrades or one-time settlements but this year it will be around a quarter of that only, she said as the overall quantum of bad assets has fallen drastically. Of the Rs 20,000 crore, cash recovery alone was Rs 5,500 crore, which it expects to fall to Rs 4,500 crore this year. The bank's overall gross bad loan ratio is came down by 288 bps to 7.34 per cent (Rs 60,104 crore) now and net NPAs by 173 bps to 1.58 per cent (Rs 12,138 crore), and hopes to bring it further down to under-6 per cent by March, she said, adding as a result, provisions for bad loans came down to Rs 1,984 crore from Rs 3,653 crore. Manimekhalai also said the bank will be raising Rs 10,000 crore in equity capital not to buffer up its core capital base but to meet the Sebi mandate of having a 25 per cent public float. Of the planned Rs 10,000 crore capital raising, Rs 8,000 crore will be equity capital and the remaining will be tier 1 &amp; 2 capital. We are more than adequately capitalised. This fundraising is to meet the 25 per cent mandatory public float, she explained. The government currently holds an 83.49 per cent stake in the bank, which has to be brought down to 75 per cent under the Sebi's listing rules. The core capital stood at 15.95 per cent from 14.42 per cent of which CET 1 (Common Equity Tier 1) stood at 12.34 per cent from 10.68 per cent, she said. The bank's profit rose 107.7 per cent to Rs 3,236 crore from Rs 1,558 crore on a steep fall in bad loans and an improvement in interest income. The total income rose to Rs 27,381 crore from Rs 20,991 crore in the same period a year ago, of which interest income improved to Rs 23,478 crore from Rs 18,174 crore.

Union Bank to sell 8 troubled accounts worth Rs 3,000 cr to bad bank NARCL

The concept of a “bad bank” has recently come to the fore again, following a decision from India’s Ministry of Finance to establishing a committee to assess the feasibility of such a vehicle as a way to solve India’s bad loan problem. No, it’s not a bank that is evil. A <keyword id="6605010" type="UNKNOWN" weightage="20" keywordseo="bad-bank">bad bank</keyword> is a corporate entity that takes up all the non-performing assets of a financial institution or a group of financial institutions at a price that is below their book value. In doing so, the sellers of these <keyword id="142154" type="PERSON" weightage="20" keywordseo="bad-loans">bad loans</keyword> are then able to clear their balance sheets and retain all the good assets after taking a write-down on the unhealthy assets. A prominent example of a bad bank in recent history is Portugal’s Novo Banco. Novo Banco was established by the Portuguese government in August 2014, as part of a rescue of the failing Banco Espirito Santo (BES), which was the second-largest private bank in Portugal at the time. BES was split into a “good bank”, comprising all its healthy assets, and a bad bank (Novo Banco), which took up all of the risky and unrecoverable loans. Restructuring assets A bad bank frees other banks from recovering their bad loans themselves. It exclusively focuses on the restructuring and <keyword id="830157" type="PERSON" weightage="20" keywordseo="liquidation">liquidation</keyword> of unhealthy assets, allowing the “good bank” to concentrate on its main operations like lending. The idea of a bad bank, or 'Public Asset Rehabilitation Agency' (PARA), was mooted in last year’s Economic Survey. While a bad bank is technically different from an asset reconstruction company (ARC), the two are, for the purpose of this undertaking, interchangeable in the eyes of the Indian government. The <keyword id="47209" type="ORGANIZATION" weightage="20" keywordseo="Finance-Ministry">Finance Ministry</keyword> wants to create a separate company to absorb a significant portion of the bad loans from India’s state-owned banks. This will enable these banks to reduce their risk and raise capital. However, the move will come at a significant cost to the Indian government as it will have to capitalise the bad bank.

What is a bad bank and how can it fix India’s bad loans problem?

<keyword id="6358006" type="CITY" weightage="100" keywordseo="Andhra-Bank">Andhra Bank</keyword> and <keyword id="6358005" type="CITY" weightage="100" keywordseo="Allahabad-Bank">Allahabad Bank</keyword>, two of the <keyword id="488657" type="UNKNOWN" weightage="100" keywordseo="state-run-banks">state-run banks</keyword> in India, have put up nearly Rs 6,000 crore of bad loans for sale, given the rising pressure on lenders to clean their books of bad debts. Andhra Bank has decided to sell off more than 100 accounts with loans that add up to about Rs 4,000 crore of loans, Allahabad Bank on the other hand, wishes to sell off 73 accounts with outstanding loans that account for Rs 2,000 crore. The assets on sale also include Seven Hills Hospital, Visa Power, Visa Steel, L&amp;T Chennai Tada Toll Road, KS Oil, Transstroy India and its associate companies <keyword id="4613817" type="UNKNOWN" weightage="100" keywordseo="maheshwari-ispat">Maheshwari Ispat</keyword> and <keyword id="452891" type="ORGANIZATION" weightage="100" keywordseo="Abhijeet-Power">Abhijeet Power</keyword>, two senior executives told <a href="http://economictimes.indiatimes.com/industry/banking/finance/banking/andhra-bank-and-allahabad-bank-to-sell-worth-rs-6000-crore-of-bad-loans/articleshow/58991440.cms">ET</a>. Around two dozen asset reconstructions companies (ARC) will participate in the bid. This is the first time that commercial banks have decided to auction their bad loans, after the <keyword id="6354335" type="CITY" weightage="100" keywordseo="reserve-bank-of-india">Reserve Bank of India</keyword> revised norms for sale of bad loans in the starting of this financial year. The new rules state that ARCs will have to pay at least half of the purchase price in cash while the balance can be paid in form of security receipts. Talking of the banks and their performance in FY 2016-17, while Andhra Bank reported a net profit of Rs 174 crore with gross bad loans of 12.2% of total loans (Rs 17,669 crore), Allahabad Bank reported a net loss of Rs 314 crore with gross bad loans of 13% (Rs 20,687 crore). (Image source YouTube)

Andhra Bank and Allahabad Bank willing to sell bad loans worth Rs 6,000 crore

New Delhi, Jun 11 () Chief Economic Advisor Krishnamurthy Subramanian on Thursday said setting up a bad bank may not be a potent option to address the non-performing asset woes in the banking sector. Subramanian said when a bank sells bad loans, it has to take a haircut because when Rs 100 goes bad, the actual amount that can be expected is lower than 100 and that leads to haircut. "So when the bank has to sell that loan to ARC (asset reconstruction company) or a new institution that is created, in that case it has to take haircut. When it takes haircut that will impact the P&amp;L (profit and loss). And that is one of the key aspect affecting the selling of loans. "So till that particular aspect is not addressed creating a new structure may not be as potent in addressing the problem, Subramanian said. Currently, banks sell their bad loans to ARCs as per the prudent norms of the Reserve Bank of India. Subramanian said currently 28 ARCs are functional and their job is to take bad loans from banks and act as bad bank. The idea of bad bank was also discussed in the meeting of the financial sector regulators FSDC earlier this month. Setting up of a bad bank to deal with the problem of mounting NPAs is not a good idea and will not yield desired results unless some key aspects like transparency and recovery rate are addressed, eminent banker Uday Kotak said earlier this week. The government was toying with the idea of creating a bad bank in 2016. Even the Economic Survey 2017 had proposed this idea, suggesting the creation of a bad bank called Public Sector Asset Rehabilitation Agency (PARA) to help tide over the problem of stressed assets. JD MKJ

Bad bank may not be a potent option to address bad loan woes: CEA

<keyword id="1895647" type="ORGANIZATION" weightage="20" keywordseo="RBI-Governor-Raghuram-Rajan">RBI Governor Raghuram Rajan</keyword> has proved that he is not just any administrator but one who walks the talk. 
 
After taking up the job, Rajan had announced that promoters cannot continue to run a business after spoiling it. And he meant it. 
 
Banks have begun taking strict actions against the defaulters and are pursuing promoters like never before to get the transaction happening. 
 Banks like State Bank of India, ICICI, Axis Bank, Bank of Baroda, etc are reducing <keyword id="142154" type="UNKNOWN" weightage="20" keywordseo="bad-loans">bad loans</keyword>. 
 
"We've been putting a lot of pressure on these borrowers and they are now finding buyers with valuations closer to their expectations," Arundhati Bhattacharya of SBI told ET, adding “cash recovery is improving because of a lot of follow-up and effort." 
 
ET reported PNB recovered more than it did last year with total recovery and upgradations up at Rs 3,418 crore in the fiscal first half from Rs 2,365 crore a year earlier. 
 
Likewise, Axis Bank recovered Rs 300 crore, ICICI recovered Rs 1,253 crore. 
 
"Our options, when we look at a stressed loan, is either carry it as a zombie, pretend and lend or accept surgery. If we have a structural solution of capacity creation then the second is better otherwise we are down the path of first," Uday Kotak, vice-chairman of Kotak Mahindra Bank, told ET.

This serious thought by RBI Governor Raghuram Rajan is helping banks in recovering money

The <a href="http://www.businessinsider.in/searchresult.cms?query=rbi&amp;sortorder=effectivedate">Reserve Bank of India (RBI)</a> took some pressure off from the banks as it trimmed the list of firms that required <a href="http://www.businessinsider.in/searchresult.cms?query=bad+loans&amp;sortorder=effectivedate">bad loan</a> provisioning. 
 
State-owned banks were under pressure to expose the highly indebted corporate houses. 
 
But, RBI struck off 20 firms and told banks that outstanding loans of these companies were not required in the March quarter. 
 
These firms included names such as Jaiprakash Associates and Coastal Energen. 
 
"On Wednesday, RBI issued a letter. Some of the companies are removed from the list and no new names have been added as yet," a banker told ET. 
 
RBI, last year, had ordered an Asset Quality Review (AQR) and declared that lenders have to set aside funds against loans given to the 150 companies. But, now the list has been trimmed. 
 
Banks had to make substantial provisions in the December quarter following the AQR, which revealed that a number of banks incurred losses.

Banks can ease a bit now as RBI cuts down the list of companies that required bad loan provisioning

<ul class="summary-list"><li>On Sunday, UBS acquired the embattled Credit Suisse for $3.25 billion.</li><li>The Fed along with five other central banks announced coordinated action to reassure global banks.</li></ul>You know something is wrong when six big central banks from around the world decide to join hands in order to reassure financial markets. That too on a Sunday night.Hours after <a href="https://www.businessinsider.com/credit-suisse-ubs-offers-up-to-billion-rescue-deal-report-2023-3">UBS announced it will acquire Credit Suisse for $3.25 billion</a>, the Federal Reserve, along with the European Central Bank, the Bank of England, the Swiss National Bank, the Bank of Canada and the Bank of Japan <a href="https://www.bloomberg.com/news/articles/2023-03-19/fed-and-five-central-banks-announce-move-to-boost-dollar-funding" target="_blank" rel="noopener">announced fresh measures</a> to ensure there is enough funding for global financial institutions amid the current stressed market conditions.American economist Nouriel Roubini, or "Dr Doom" as he is often referred to, <a href="https://twitter.com/Nouriel/status/1637567346523996161" target="_blank" rel="noopener">broke down this measure in a tweet</a>."Use of Fed international swap lines spikes during severe risk off episodes when there is shortage of global dollar liquidity: GFC, EZ crisis, temper tantrum, Covid 3/20 shock. Expect another likely spike now. That is why the CBs coordinated action today," Roubini tweeted Sunday night.To make sense of those acronyms, GFC refers to the global financial crisis of 2007 to 2009, EZ crisis is the Eurozone crisis of 2009 onwards, temper tantrum likely refers to the taper tantrum of 2013, and the Covid 3/20 shock is when global markets went haywire in the early stages of the pandemic. It's wild to think that the current market situation is similar to the ones mentioned on Roubini's list. But the events of the past two weeks have investors - both institutional and retail - worried over financial stability and the fate of the economy.So, you might be wondering: Just how bad is the banking crisis?In less than two weeks, three US banks, Silvergate, SVB, and Signature Bank, and a big global lender like Credit Suisse have collapsed, bringing back fears of a full-blown financial crisis.<h2>So how big is this crisis then?</h2>"Despite the shockwaves, we expect that the banking crisis could ultimately prove to be beneficial for global markets for several reasons," deVere Group's Nigel Green said in a note on Monday morning.Green adds that the "emergency lifelines" that the regulators and governments have provided to the banks have curbed any risk of contagion within the sector and the chances of turmoil spreading across other firms and sectors has been contained.It all started with the collapse of Silvergate, SVB ,and Signature Bank in the US. Crypto-friendly bank Silvergate announced it would liquidate, before SVB was shut by the regulators on March 10 and put under the control of the Federal Deposit Insurance Corp (FDIC). The FDIC later seized Signature Bank.Things moved very quickly in the case of SVB - the country's 16th largest bank. As soon as SVB announced it needed to raise capital, customers panicked and rushed to withdraw their money. The speed at which clients withdrew their funds from SVB shows <a href="https://www.businessinsider.com/svb-decimated-24-hours-digital-banking-trump-regulatory-rollbacks-2023-3">how quickly a bank run can take place</a> in the digital age.The Treasury, the Fed and the U.S. President himself rushed to reassure the depositors that their money was safe. However, another crisis was brewing in Europe.Investors had been watching the <a href="https://markets.businessinsider.com/news/stocks/credit-suisse-svb-bank-financial-crisis-stock-price-cds-saudi-2023-3?_gl=1*xj9ql0*_ga*MTYxNTE3MzUyMy4xNjU1Mzc5NjM2*_ga_E21CV80ZCZ*MTY3OTMxMDM2Ny4xODIuMS4xNjc5MzEwNzc3LjQyLjAuMA..">slow decline of Credit Suisse over the years</a>, mainly attributed to its accounting errors, its involvement in multiple scandals, billions in losses, several turnaround plans and more. But the SVB collapse exacerbated those concerns as investors started looking around at other banks that could be in a similar position."A harsh spotlight has been focused on banks in the last week and while it has been for many of the wrong reasons, it has also served to highlight to investors that the rules imposed in the wake of the 2008 financial crisis mean that most banks are in a strong position to withstand shocks," deVere's Green said.That said, banks across the world are still adjusting to the steep surge in interest rates. Lenders had gotten used to years of low-cost borrowing due to a regime of ultra-low interest rates maintained by central banks around the world. But the sudden increase in rates over the past year has borrowers struggling to manage their portfolios."The week ahead looks like a movable feast already, but it seems a safe bet that further central bank intervention is on the cards: and further changes in the global financial architecture, with a larger role for government/regulators," Rabobank said in a research note on Monday.<h2>What's next?</h2>Investors will be watching two big themes in the market over the next few days to understand how the banking crisis is going to play out.On Sunday, Credit Suisse said that as part of the rescue deal, the Swiss regulator requires almost $17 billion of the lender's so-called Additional Tier 1 (AT1) debt to be written down to zero."That appears to have spooked investors and has led to a sell-off in other bank debt and that's weighed on share prices," Russ Mould, Investment Director at AJ Mould said in a research note on Monday morning."It means the banking crisis we've seen over the past few weeks has started a new chapter rather than reaching its ending."AT1 or Contingent Convertible (CoCo) bonds are basically debt securities that convert into equity when the capital buffers of a bank fall below a certain level. After the 2008 financial crisis, the Bank of International Settlements (BIS) made it necessary for all European banks to issue CoCo bonds.The second big event this week is the Federal Reserve's interest-rate decision on Wednesday. Most economists and market watchers had been predicting a 25 basis point rate hike from the Fed, taking the US central bank's benchmark rate to 5%.However, the coordinated action from the Fed and five other central banks on Sunday night is seen by many as a step toward pausing rate hikes. The market has been choppy over the past few weeks and while the central banks, the regulators and governments have stepped in to contain contagion, there is still a lot of uncertainty over how the high inflation, high interest-rate environment will impact the global economy."Central banks know that besides having to try and tame stubbornly high inflation, they also need to ensure financial stability. The events of the last week which rocked confidence will certainly give them cause for pause," deVere's Green said."The growing case for interest-rate hikes to be paused will be cheered by global markets."

How bad is the banking crisis?

The mainstream business media is abuzz with reports that Finance Minister Arun Jaitley will announce the proposal for establishing a sovereign asset reconstruction company, popularly known as “bad bank”, to acquire the NPAs from public sector banks, in the upcoming Union Budget 2016-17 on February 29. 
 
As it is widely known, public sector banks have been suffering from a spurt of NPAs for a while now with the third quarter of FY16 witnessing a sharp rise as fallout from stress in sectors like steel, power and infrastructure. 
 
Before we proceed. a quick word about how asset reconstruction companies function is in order; an asset reconstruction companies, or a “bad bank” essentially purchases all the NPA loans from a bank against cash at the NPV of the loans. By thus purchasing all the NPAs on the balance sheet, it frees up capital that the banks have to otherwise “lock in” to provision against the NPAs and the banks may use the extra capital to create more loans to corporates and consumers, and thus giving a fillip to the economy. 
 
The “bad bank”, in turn, resolves the NPAs on its balance sheet by taking several steps against the borrower (these may inter alia, include filing a suit, foreclose the debt and the like). 
 
So what’s not to like? Let the bad bank take care of the bad loans and the good banks get back to business again; sounds like a plan. Except that it’s not and that too for several reasons. 
 
Firstly, India’s banking sector is a peculiar mix of state owned banks (public sector banks or “PSBs”) and private sector banks. As the shareholder in public sector banks, the government (and therefore the tax payer in substance) is already underwriting the risk for public sector banks. 
 
Since the government will in practice almost never go bankrupt, the cost of capital demanded by investors in PSBs is always low relative to their true cost. The rating agencies too rate their debt taking into account the “taxpayer put”. 
 
This perpetual taxpayer put induces the risk of what economists call, moral hazard among the PSBs and their management; in other words, knowing beforehand that the government will always fund them (when the capital markets won’t), PSBs were likely less than diligent in loan appraisals. Indeed, the government has already decided to recapitalize the PSBs over a three year period pursuant to the “Indradhanush” scheme. 
 
In the light of this already existing capital subsidy, a publicly funded asset reconstruction company will aggravate the moral hazard already entrenched in PSB management. Instead of injecting market discipline and making prudent investments, knowing that they can offload debt to this sovereign bad bank will create a further disincentive to be diligent. And that would run contrary to one of the principal lessons of the financial crisis of 2008; the prevention or avoidance of moral hazard in banking. 
 
Secondly, to the extent a clean-up of the balance sheet is necessary, India already has established a regulated asset reconstruction industry. Unlike the proposed sovereign-backed asset reconstruction company, these asset reconstruction companies are privately funded and therefore will only buy assets from the PSBs at their true cost, inflicting losses and preventing moral hazard (and thus inject market discipline among PSBs). 
 
The government should push the management to utilize this route. Admittedly, certain regulatory restrictions and restrictions on raising capital are limiting emergence of a thriving market in bad loans; but the solution to the issue lies in engaging the stakeholders and correct the regulatory architecture all banks may utilize. (Illustratively, the RBI recently enacted a rule that requires asset reconstruction companies to bring not less than 15 % of the purchase consideration in cash. This rule foreclosed the option of bridging “valuation gaps” through security receipts and froze the markets). 
 
Instead of proposing a sovereign “bad bank”, the Union Budget-2016 should focus on policies aimed at enabling emergence of a thriving distressed debt trading and resolution market. Finally, the Budget should complement the capital infusions pursuant to “Indradhanush” by augmenting human capital at PSBs inter alia, by allocating moneys for hiring top talent at directorial and executive positions. 
 
Finally, the government should privatize control over PSBs consistent with Nayak Committee recommendations as a step towards complete privatization. 
 
To conclude; it’s easy to enact a law for a sovereign “bad bank” and ease the short term pain of PSBs and let the imprudent lending continue to hurt the economy in the long run. But ensuring long term robustness in banking requires the Finance Minister to be the Ulysses and tie himself to the mast so he may resist these siren calls of doom. 
 
(The article is authored by Mandar Kagade, policy analyst with the Bharti Institute of Public Policy at the Indian School Of Business)

Budget 2016: Here’s why a sovereign ‘bad bank’ will be a bad idea

Some of the crucial sectors, including infrastructure, chemicals, engineering and mining contribute to 36% of the overall 4.1% <keyword id="142154" type="UNKNOWN" weightage="100" keywordseo="bad-loans">bad loans</keyword> 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 <keyword id="6355548" type="ORGANIZATION" weightage="100" keywordseo="Public-Sector-Banks">public sector banks</keyword> were the chief sources of stress, the central bank said.<o:p></o:p>

	As per the <keyword id="30067" type="ORGANIZATION" weightage="100" keywordseo="RBI">RBI</keyword>, 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.<o:p></o:p>

	“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.<o:p></o:p>

	It also said the contribution of mandatory priority sector loans to the overall bad assets have come down during the last financial year.<o:p></o:p>

6 Crucial Sectors Contribute To 36% Of Total Bad Loans

<ul><li>Congress chief spokesperson, <keyword id="214856" type="PERSON" weightage="20" keywordseo="Randeep-Singh-Surjewala">Randeep Singh Surjewala</keyword> said, BJP must talk about an increase in bad loans at <keyword id="45660" type="COMPANY" weightage="20" keywordseo="Yes-Bank">Yes Bank</keyword> in the last five years. </li><li>The Congress alleged the loans given by Yes Bank rose 100 per cent in just two years.</li></ul>The <keyword id="58687" type="ORGANIZATION" weightage="20" keywordseo="Bharatiya-Janata-Party">Bharatiya Janata Party</keyword> (BJP) government must talk about increase in bad loans at Yes Bank in the last five years after Narendra Modi came to power, and should not try to divert public attention, said Congress chief spokesperson, Randeep Singh Surjewala here on Sunday. Responding to the BJP allegations on Yes Bank promoter Rana Kapoor's links with the Congress, Surjewala said the government must answer around Rs 2,00,000 crore rise in Yes Bank loan book from Rs 55,633 crore in March 2014 to Rs 2,41,499 crore in March 2019, and not obfuscate the real issue of people's money sinking into a <keyword id="6605010" type="UNKNOWN" weightage="20" keywordseo="bad-bank">bad bank</keyword>. The relation between the BJP and Kapoor "is well-known", Surjewala said and added, why did the Prime Minister address a Yes Bank-sponsored conference on March 6, despite "the RBI moratorium." The Congress alleged the loans given by Yes Bank rose 100 per cent in just two years after demonetisation from Rs 98,210 crore in March 2016 to Rs 2,03,534 crore in March 2018. Also, the BJP government of Haryana deposited over Rs 1,000 crore in Yes Bank just a month ago, knowing that it was sinking, he said and wondered if Devendra Fadnavis-led BJP government in Maharashtra also deposited money in the private bank. "How does an M.F. Hussain painting of Rajiv Gandhi sold 10 years ago by <keyword id="12587" type="PERSON" weightage="20" keywordseo="Priyanka-Gandhi">Priyanka Gandhi</keyword> to Yes Bank owner Rana Kapoor &amp; disclosed in her tax returns connect with unprecedented giving of loans of Rs 2,00,000 crore in 5 years of the Modi government," Surjewala said responding to a tweet by BJP leader <keyword id="342587" type="PERSON" weightage="20" keywordseo="Amit-Malviya">Amit Malviya</keyword> on the sale and purchase of Rajiv Gandhi's portrait by Hussain.

You Searched For "bad bank" and got 11 results

India wants to establish a mega-asset manager to tackle its bad loan problem

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Union Bank to sell 8 troubled accounts worth Rs 3,000 cr to bad bank NARCL

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What is a bad bank and how can it fix India’s bad loans problem?

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Andhra Bank and Allahabad Bank willing to sell bad loans worth Rs 6,000 crore

BI India Bureau

Bad bank may not be a potent option to address bad loan woes: CEA

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This serious thought by RBI Governor Raghuram Rajan is helping banks in recovering money

BI India Bureau

Banks can ease a bit now as RBI cuts down the list of companies that required bad loan provisioning

BI India Bureau

How bad is the banking crisis?

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Budget 2016: Here’s why a sovereign ‘bad bank’ will be a bad idea

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6 Crucial Sectors Contribute To 36% Of Total Bad Loans

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Yes Bank Crisis: Congress raises question over Rana Kapoor's links with BJP

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