Amidst mounting bad loans, Finance Minister Arun Jaitley will hold a meeting with the heads of public sector banks on September 16 to find ways to deal with the situation.
“The Finance Minister will review the first quarter performance of public sector banks and financial institutions on September 16,” sources said.
Besides, he will also discuss credit growth and bad loan situation, they said, adding that the various recovery measures by banks and the legislative steps taken by the Government to expedite recovery are also part of the agenda. The banks have stepped up efforts as far as recovery of bad loans is concerned, the sources added. Gross NPA of the public sector banks have surged from 5.43 per cent (Rs 2.67 lakh crore) in 2014-15 to 9.32 per cent (Rs 4.76 lakh crore) in 2015-16. As per the latest Financial Stability Report by RBI, the Gross Non-Performing Assets ratio for public sector banks may go up to 10.1 per cent by March 2017 under the baseline scenario.
Many banks including Bank of India, Dena Bank, and Central Bank of India, reported losses for the quarter ended June 30, due to a sharp jump in provisions for NPAs on account of an asset quality review mandated by the RBI in December.