New Delhi: Concerned over rising bad loans, Finance Minister Pranab Mukherjee on Monday asked the banks to take steps to manage their non-performing assets (NPAs) which have grown on account of economic downturn.
"NPAs have grown at an uncomfortable and unacceptable rate in the past couple of years. The RBI has recently advised the selected banks to take necessary steps for appropriate NPA management. I hope the concerned banks will act on the advice of the RBI," he said.
The banks, he added, "have to tread cautiously in the risks confronting the banking sector, especially the risks arising out of the asset quality, market volatility and the global downturn".
The Minister talked about rising bad loans of the banking sector at a function to launch the 4001st branch of the Bank of India (BoI). Mukherjee inaugurated the branch at Manipur by pressing a button from New Delhi.
NPA of public sector banks stood at about 3.3 per cent of the assets in 2011-12 as against 2.3 per cent a year ago.
Several companies are opting for corporate debt restructuring (CDR) to tide over the difficult financial situation in the backdrop of slowdown.
Later talking to reporters, Financial Services Secretary DK Mittal said that while NPAs is a concern, there was "nothing to panic".
"NPAs is not something which means that assets are lost. It only means that these asset is not able to pay me for 90 days," he said adding recovery by banks in the last quarter of 2011-12 was highest ever.
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