MUMBAI, DEC 7: The strong recovery measures initiated by the Reserve Bank of India have failed to reduce the sticky loans - the Non-Performing Assets (NPA) - of commercial banks.

While the net profits of commercial banks shot up to Rs 4,578 crore in 1996-97 from Rs 939 crore, net NPAs of public sector banks also went up from Rs 18,297.5 crore to Rs 20,284.7 crore, thus nullifying the improved performance.

This was revealed by a central bank `report on trends and progress of banking in India'. The RBI and the bank officials, however, kept the identity of loan defaulters as a top secret.

Bad loans are not a bane of PSU banks alone; nine new private sector banks have accumulated net NPA of Rs 161.41 crore. But the gross NPA of public sector banks will be more than double this figure - around Rs 42,000 crore as per one estimate.

The gross NPA of banks reflects the health of Indian banks. Many of them resort to large scale writing off of bad loans to show a healthy balance sheet.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.