Inaugurating the Kerala government's `Kudumbashree programme' aimed at eradication of poverty with the participation of women at the grassroot level, the Prime Minister said that big borrowers together owed as much as Rs 45,000 crore to the banks. The entire banking system was under pressure because of these non-performing assets (NPAs). "My government is seriously considering effective steps to recover bad debts," Vajpayee said.

The Prime Minister expressed the hope that the big borrowers would learn from the poor village women the `dharma' of repaying loans in time. The `Kudumbashree' programme was aimed at the creation of thrift societies by ward-level women societies to serve as unofficial banks of the poor.

EEB adds: Bank employees have demanded that a list of defaulterswho have failed to repay loans be published so that the nexus between certain politicians, captains of industry and trade is exposed. Despite the unions' suggestion that such a list be published and wilful default of bank loans be made a criminal offence, the second report of the Narasimham Committeee on banking sector reforms is `conspicuously' silent on the issue, according to the National Confederation of Bank Employees (NCBE).

Concerned over the rising level of non-performing assets (NPAs) -- or defaulted loans -- of commercial banks, the Narasimham Committee has recommended the setting up of an asset reconstruction company (ARC) for banks with high NPA portfolios.

The panel, which submitted it report last week, has suggested that the ARC can be an alternative to the asset reconstruction fund (ARF) which had earlier been recommended by the first Narasimham panel on financial sector reforms set up in 1991. The committee has said that all loan assets in the doubtful and loss categories should beidentified and their realisable value determined. "These assets could then be transferred to a reconstruction company," it said.

FIs bad loans shoot up

MUMBAI: Financial institutions are not lagging behind banks in accumulating non-performing assets (NPAs). ICICI's net NPA shot up from Rs 1,950 crore to Rs 2,810 crore for the year ended March 1998. IDBI's NPA level has gone up from Rs 4,365 crore to Rs 5,101 crore. IFCI, which is yet to announce the results, may not be a different story.

The bad loans have gone up even after attempts by institutions to reschedule their sticky loans to keep them out of the NPA bracket, sources said. FIs had written off interest charges in some cases. FI officials blamed the general depression in the economic scenario for the rising level of NPAs. ``Even many good companies had defaulted on their repayment commitments,'' said an official.

The NPAs of commercial banks at the gross level have already exceeded Rs 43,500 crore for the year 1996-97 as againstRs 41,600 crore in the previous year. The net NPA at the net level is Rs 20,285 crore as against Rs 18,297 crore in the previous year. According to the RBI, almost all commercial banks, including public sector, private and foreign banks, have NPAs. Bank of Baroda has a net NPA level of Rs 1477.96 crore, Indian Bank Rs 1735 crore, Punjab National Bank Rs 1441.74 crore and Central Bank of India Rs 1267 crore. Federal Bank's net NPA is Rs 214.38 crore, Bank of Rajasthan Rs 132 crore and Bank of Tokyo-Mistubishi Rs 189 crore.