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PSU banks with highest NPA's
Jan 6, 2014

It's no news that Public sector banks are in trouble. While rising non-performing assets (NPAs) are a cause of worry for the entire banking sector, it is more so in case of Public sector banks than Private sector banks. Poor credit appraisal, over leveraging and the practice of giving fresh loans to pay off the old ones and leaving the mess for the successor are some of the practices that are prevalent in the Public banking system. Over the last decade, the share of Public sector banks in banking loans has risen only marginally. However, their share in gross NPAs has gone up at an alarming rate. In contrast, the Private sector banks have more than doubled their share in loans while their contribution to gross NPAs has grown at a lesser rate. The actual situation for Public sector banks could be much worse because of the practice of loan write offs.

As per an article in Business Standard, many NPA ratios don't even include heavy debts of some highly indebted corporate groups. In a lot of cases, the tool of restructuring is being misused to manipulate the NPAs. Despite operating in the same economy, the poor performance of public sector banks versus the private sector banks clearly indicates that something is wrong with the former's procedures, policies and the management. No wonder that private sector banks enjoy better valuations over their public peers. It is time that banks and policymakers give a serious thought to bringing some positive changes in the way Public sector banks operate. This is because no economy can be strong unless it enjoys the support of a strong and healthy banking system.

Source: Business Standard

This Chart Of The Day was published in The 5 Minute WrapUp - Can the government fill this hole?

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2 Responses to "PSU banks with highest NPA's"

Stephen John

Aug 11, 2014

Please provide us with the PSU Banks with highest NPAs

Like (32)

Ashok Kumar Sethi

May 5, 2014

It is quite apparent that those Public Sector Banks which are not managed efficiently and there are crisscross political interference basically due to nominated directors of political affiliations get affected badly by Non Performing Assets are losing their credibility in the trading. The art of granting fresh loans for repayment of old loans, etc are all tactics in siphoning of Public Money. Therefore, the RBI should immediately take appropriate appraisal of losing banking shares. For example, I purchased 100 shares of Indian Overseas Bank at premium of Rs 135 per share and the reverse trend has given me net loss heavily. Similar is the situation for Andhra Bank shares, I got 300 shares in the initial phase of issue and have reaped good profits in the last 20 yrs. A year ago, the price range was Rs 135 to Rs 145 and today it is in the range of 60 to 65. Now, I can visualize and affirm that the industrialists and capitalists are taking maximum benefits from such PSUs Banks and getting their loans written off as bad debt at the cost of exchequers. The politicians, bureaucrats and economists all are in alliance with each other and eating the public funds. Such cheaters are not nationalist and would loot the country by such manipulation and fraudulent practices. It must be stopped.

Like (29)
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