NPAs of PSU banks reach Rs 1.76 lakh crore; Govt says “no cause for alarm”

FM P Chidambaram with CMDs of public sector banks (File Photo)

Non-Performing Assets (NPAs) of public sector banks have shown a steep increase indicating the stress in the economy of the country. The finance ministry has however assured that there is no cause for alarm, and the situation is being closely monitored. According to the provisional data received from the Reserve Bank of India (RBI)…
the Gross Non-Performing Assets (NPAs) of Public Sector Banks (PSBs) as on June 30, 2013 was whopping Rs 1,76,009 crore.  It was a substantial increase as the Gross NPAs of PSBs were Rs 1, 12,489 crore in March 2012 and Rs 1, 55,890 crore in March, 2013.
This was stated in Parliament by the minister of state for finance Namo Narain Meena.
Meanwhile, the Reserve Bank of India (RBI) has informed that five complaints regarding irregularities in restructuring of loans in public sector banks in the country have been received. One representation is from Institute of Cost and Works Accountants of India (ICWAI), a complaint from a Member of Parliament and three complaints are from other persons.
A Working Group (WG), constituted by RBI to review the Prudential guidelines on Restructuring of Advances, had examined the issues related to misuse of restructuring mechanism and made various recommendations for rationalizing and tightening the existing guidelines, a statement issued by the ministry of finance quoting Meena’s written reply to a question in the Rajya Sabha, said. A detailed guideline on restructuring of advances was issued by RBI on May 30, 2013.