The non-performing assets (NPAs) of the 19 nationalised banks in the country were nearly double the total net profit earned by these banks at the end of financial year 1998-99. So mammoth is this burden that Indian public sector banks have lost Rs 3,237 crore on the average interest paid on the total NPAs locked in their books as on March-end, 1999.

According to a study undertaken by the Federation of Indian Chambers of Commerce and Industry, the results of these banks for 1998-99 indicate that the problem continues to retain its intensity, exerting an upward pressure on lending rates while considerably depressing the spreads and the profits of the banks. Even the private sector banks do not seem to be any better placed as far as the incidence of NPAs is concerned.