Reserve Bank flags rising bad assets from Mudra loans

News:The Reserve Bank of India (RBI) has expressed concern over rising bad loans from Pradhan Mantri MUDRA Yo­jana(PMMY). Facts: About Rising Bad loans in MUDRA Yojana: The RBI Deputy Governor said that MUDRA was launched with the objective of lifting many beneficiaries out of poverty. However,there have been concerns at the growing level of non-performing… Continue reading Reserve Bank flags rising bad assets from Mudra loans

Govt. asks PSBs to find out reasons for rise in NPAs in last 5 years

The Finance Ministry has initiated a comprehensive consultative process with public sector banks(PSBs). The consultative process will start from branch level upwards to the State-level and then to the national level. The process aims to find out the reasons for the sharp rise in bad loans in the previous five years apart from outlining national… Continue reading Govt. asks PSBs to find out reasons for rise in NPAs in last 5 years

Banks’ bad loans down at 9.34 lakh crore at FY19-end

Finance minister has informed the Parliament that Gross non performing assets(NPA) of scheduled commercial banks has declined by Rs 1.02 lakh crore to Rs 9.34 lakh crore in 2018-19. Non-performing assets(NPA) is a loan or advance for which the principal or interest payment remained overdue for a period of 90 days. The decline in number… Continue reading Banks’ bad loans down at 9.34 lakh crore at FY19-end

Bank NPA

Union Minister of Finance informed Lok Sabha about the present state of Bank Non Performing assets(NPA) in India. The minister said that as per RBI provisional data on global operations, the aggregate amount of gross NPAs of Public sector banks(PSBs) and Scheduled Commercial Banks(SCBs) till 31st March,2019 were Rs.8 lakh crore and Rs. 9.5 lakh… Continue reading Bank NPA

MUDRA bad loans rise in FY19, even as NPAs decline across banking system

The government’s MUDRA scheme to finance small and micro borrowers has witnessed an increase in bad loans at a time when the system-wide non-performing assets(NPAs) have started showing signs of a decline. NPA is a loan or advance for which the principal or interest payment remained overdue for a period of 90 days. The NPAs… Continue reading MUDRA bad loans rise in FY19, even as NPAs decline across banking system

RBI now uses divergence to compel banks to improve their loan-loss ratios

Recently,three state-run banks had reported divergence in bad loan recognition while announcing the results. Divergence takes place when the Reserve Bank of India (RBI) finds that a lender has under-reported (or not reported at all) bad loans in a particular year and hence asks the lender to make disclosures if under-reporting is more than 10%… Continue reading RBI now uses divergence to compel banks to improve their loan-loss ratios

NCLAT allows banks to declare defaulting IL&FS, group companies as NPAs

The National Company Law Appellate Tribunal (NCLAT) has allowed the banks to declare the accounts of IL&FS and its group companies as non-performing assets(NPA) if they have defaulted on payments.NPA is a loan or advance for which the principal or interest payment remained overdue for a period of 90 days. However,the appellate tribunal has said… Continue reading NCLAT allows banks to declare defaulting IL&FS, group companies as NPAs

Bad debt norms:RBI to seek EC nod

The Reserve Bank of India (RBI) has decided to reach out to the Election Commission (EC) before releasing its new circular for banks. The new circular would replace its February 12 circular that Supreme Court had disallowed earlier.The Model Code of conduct specifically exempted the conduct of monetary policy which is crucial part of the… Continue reading Bad debt norms:RBI to seek EC nod

SC to hear petition to end write-offs

A petition has been filed in the Supreme Court to restrain banks from writing off non-performing assets(NPAs) and governments from waiving off farm loans. The petitioner has said that Supreme Court should (a)restrain banks from writing-off of NPAs so that exact financial conditions of the banks can be shown(b) The Centre and state governments should… Continue reading SC to hear petition to end write-offs

High stock of non-performing assets in India, more progress needed: IMF

According to the International Monetary Fund(IMF),the level of non-performing loans in India remains high.IMF has favoured strengthening the level of capitalisation of some banks,particularly government-owned banks. Further,the IMF has said that strengthening the level of capitalisation in banks was one of the recommendations of the Financial Sector Assessment Programme (FSAP) for India. The Financial Sector… Continue reading High stock of non-performing assets in India, more progress needed: IMF