Low provisioning for security receipts against stressed assets could hurt banks BL Research Bureau Banks, which are already groaning under the burden of non-performing assets NPAs imposed on them by the steel, power, infrastructure and manufacturing industries, may be in for yet more bad news. Strikingly, banks have made an average provisioning of just per cent against these SRs. Given that the recovery rate on SRs so far has been just per cent, banks may be in for more pain ahead. Banks stop recording the assets sold to ARCs as bad loans in their books, and do not make provisions for them.
The reason for the big loss figure is higher provisions, a total of about Rs 19, crore in the first quarter. Out of this, provisions on NPAs were about Rs 13, crore, while the rest is to cover treasury losses owing to hardening of bond yields and higher provision on account of wage revisions and enhancement in gratuity ceiling.
Compared with the March quarter, the bank has seen minor improvement in the NPA ratio. On the loan recovery too, the bank has seen some relief. Even after excluding the impact of such resolution, the YoY growth in Recovery in Written Off accounts is The pain of bad loans has hit the earnings of most state-run banks in the recent quarters, while private banks have reported largely better numbers.
The bank has targeted to recover Rs20, crore in the first half of With the insolvency and bankruptcy code picking up pace, banks expect more recovery from corporate resolution in the coming months.
Going ahead, a lot will depend upon how soon the economic growth recovery takes firm hold and cash flows of companies improve enabling them repay loans on time.
The pain of bad loans will continue for a few quarters but the recovery figures indicate that most banks might have seen the worst phase already. Data support from Kishor Kadam Updated Date: Aug 10, Sep 28, · SBI puts up 11 NPA accounts for sale to recover Rs 1, crore 4 Nov, , AM IST SBI has put up 11 non-performing assets (NPAs) for sale to ARCs and financial companies to recover dues of nearly Rs 1, crore.
SBI Chairman lists these reasons behind NPA mess, says banks need to do this now The problem of mounting NPAs came into existence due to a delayed response from banks, said SBI Chairman. Get State Bank of India latest Quarterly Results, Financial Statements and State Bank of India detailed profit and loss accounts.
SBI is said to have assets over $ Bn and offers services in areas such as retail, corporate banking, financing, and insurance. The Indian banks are said to have to battle with NPA’s worth.
NEW DELHI: State-owned lenders SBI and UCO Bank are looking for buyers to sell non-performing accounts (NPAs) worth Rs 1, crore and have invited bids .
NPA at SBI group From to gross NPA was , (in Rs. Cr.) and net NPA was , (in Rs.
Cr.) Percentage of Gross NPA s is on average of five year is %, Percentage of Net NPA is on average of five year is %.