Stress assets of Indian banks may go upto Rs.10 lakh crore: ASSOCHAM

Due to slowdown in certain important sectors like steel, textiles, aluminium etc, the stressed assets of the banks to Rs 10 lakh crore mark in the fourth quarter of the current fiscal, reveals the ASSOCHAM latest study.

At the end of December 2015, the total stressed assets (Gross NPA+ restructured assets) of all the banks were at Rs 8 lakh crore. Total stressed assets of banks increased to Rs 7.40 lakh crore at the end of March 2015 from Rs 2.33 lakh crore as on March 2011, nearly a four-fold increase.

Gross NPAs of state-run banks increased from Rs 2,67,065 lakh crore in March 2015 to Rs 3,61,731 lakh crore in December 2015. In contrast, the private sector banks’ Gross NPA rose to Rs 39,859 crore at the end of December from Rs 31,576 crore at the end of March 2015."

Thus, in percentage terms, the gross NPA ratio of Public Sector Banks (PSBs) increased sharply from 5.43 per cent as on March 2015 to 7.30 per cent as on December 2015 while it was milder in case of private sector banks. The upward movement was from 2.20 per cent to 2.36 per cent.

The mounting bad loans have eroded the profitability of all banks with 11 public sector lenders reporting losses of Rs 12,867 crore in the third quarter.

For example, Bank of Baroda reported a whopping loss of Rs 3,342 crore, the highest ever quarterly loss posted by any public sector bank in the industry. IDBI Bank recorded a loss of Rs 2,184 crore while Bank of India posted a loss Rs 1,505 crore for the quarter ended December.

Besides, UCO Bank reported a net loss of Rs 1,497 crore, followed by Indian Overseas Bank (Rs 1,425 crore), Central Bank of India (Rs 837 crore) and Dena Bank (Rs 663 crore).

Banks which posted sub-Rs 500 crore loss were Kolkata-based Allahabad Bank (Rs 486 crore), Oriental Bank of Commerce (Rs 425 crore), Corporation Bank (Rs 383 crore) and Syndicate Bank (Rs 120 crore).

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