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PSU banks' NPAs pose a major risk...
Apr 30, 2014

The RBI's agony over the deterioration in quality of assets of PSU banks is well understood. Especially when seen in context of the Indian financial sector as a whole. That the government owned banks corner nearly two thirds of the assets in the banking sector is well known. What is not known is the fact that the PSU banks tower over other financial institutions holding public assets and have a larger share of assets than insurance companies, NBFCs and mutual funds put together. In addition they account for 63.2% of the GDP. Thus a systemic NPA crisis in PSU banks threatens to risk the entire financial sector in India. And the RBI should therefore not just curtail asset slippage but also ensure better management of the PSU banks.

Data Source: RBI

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