Public sector banks have disclosed bad loans or non-performing assets worth Rs 2.41 lakh crore for the last six months, The Indian Express reported. This is a 69% rise in bad loans over the last two quarters. In September 2015, the figure stood at Rs 349,113 crore, but at the end of March 2016, it was Rs 590,772 crore. The Reserve Bank of India had ordered an asset quality review at the end of the last financial year to assess the situation.
According to the report, the spike in non-performing assets, which are loans for which people have failed to repay the interest or principal amount, was largely owing to an increase in provisioning by the public sector banks. The RBI had encouraged banks to tighten their provisioning norms – which push banks to set aside addition funds against loans given out as a safeguard.
The banks that are in particularly troubled positions are – Indian Overseas Bank, UCO Bank, Bank of India, Punjab National Bank, Canara Bank and Allahabad Bank.