The finance ministers meeting with bank chiefs on the 12th of January is mainly to discuss the problems of non-performing assets (NPA's). The gross NPA's in FY99 have gone up in absolute terms to Rs 330.69 bn (16.02%of gross assets) and net NPA's to Rs 157.94 bn (8.35% of net assets) as compared to FY98 figures of gross NPA's of Rs301.3 bn (16.88% of gross assets) and net NPA's of Rs144.98 bn (8.91% of net assets). Though the figures for NPA's have gone up in absolute terms, on percentages terms there seem to be an improvement in FY99 in the NPA levels of banks. However this may have come about because of the better economic scenario and not because of efforts put in by the banks. Indian banks have been trying to bring down their NPA levels in the last couple of years and have succeeded to a certain extent. However the slowdown in the industry in the last 2-3 years bad loans had resulted in increased NPA's.
The current meeting that has been called is largely to address these critical issues relating to reduction in NPA's. The bank chiefs' concerns is a positive sign though, much will depend on the governments' efforts to this effect. Also other critical issues which need to be addressed are the speeding up of the loan recovery process, improvement in the public sector banks credit appraisal systems and the need to define good governance. There is a strong need to have higher protection for lending banks, as the present legal system is so old that recovery of a bad loan can sometimes take many years.
IDBI BANK share price is trading up by 10% and its current market price is Rs 37. The BSE BANKEX is up by 3.3%. The top gainers in the BSE BANKEX Index is IDBI BANK (up 10.1%).
IDFC FIRST BANK share price is trading up by 6% and its current market price is Rs 54. The BSE BANKEX is up by 2.8%. The top gainers in the BSE BANKEX Index are IDFC FIRST BANK (up 5.5%) and FEDERAL BANK (up 6.3%).
FEDERAL BANK share price is trading up by 5% and its current market price is Rs 75. The BSE BANKEX is up by 1.3%. The top gainers in the BSE BANKEX Index is FEDERAL BANK (up 5.1%).
IDBI BANK share price is trading up by 5% and its current market price is Rs 36. The BSE BANKEX is up by 1.2%. The top gainers in the BSE BANKEX Index is IDBI BANK (up 5.2%).
BANK OF MAHARASHTRA share price is trading up by 11% and its current market price is Rs 25. The BSE BANKEX is up by 1.2%. The top gainers in the BSE BANKEX Index is BANK OF MAHARASHTRA (up 10.8%).
More Views on NewsA tiny chemical company, started in the Licence Raj era, is a great example of a new wealth creating opportunity.
In this video I'll show you exactly how I go about picking stocks for trading.
Rather than predicting the market, successful investing is more about preparing well and placing your bets accordingly.
What should you do if the market falls? In this video, I'll tell you what I will do.
Ajit Dayal on how India's vaccine strategy will impact the markets.
More
Equitymaster requests your view! Post a comment on "Highlight of bankers meet to reduce Non performing assets". Click here!
Comments are moderated by Equitymaster, in accordance with the Terms of Use, and may not appear
on this article until they have been reviewed and deemed appropriate for posting.
In the meantime, you may want to share this article with your friends!