NPAs of banks, FIs over Rs 80,000 cr

NPAs of banks, FIs over Rs 80,000 cr
SANTANU GHOSH

NEW DELHI, FEB 20: Inspite of the best efforts of the finance ministry to reduce the amount of non performing assets (NPAs) of the banks and financial institutions, the NPAs have touched a whopping figure of around Rs 80,000 crore.

Incidentally, a couple of months back, the finance ministry was projecting a total NPA of around Rs 52,000 crore in the banking sector. According to official sources in the finance ministry, total amount of default on the banks and FIs, as on March 31, 2000, stood at Rs 79,185 crore. This, coupled with the added number of the NPAs in the last 10 months, would definitely cross Rs 80,000 crore sources added.

Out of these NPAs, suits have been filed on 4,303 cases amounting to Rs 24,727 crore in the case of the banks. On the other hand, in the case of the FIs, suits have been filed in 1,166 cases amounting to Rs 8,349 crore. Some of the suits have also been filed in the case of those NPAs which are below Rs 1 crore, sources added.

The rise in the NPAs is inspite of the recently announced scheme of one time settlement announced by the Reserve Bank of India (RBI) some time back. The one-time settlement scheme, which enabled the defaulters to pay the outstanding and a simple rate of interest on the defaulted amount, was aimed at reducing the NPAs for the banks.

The RBI had announced that the one time settlement scheme would be valid till March 31, 2001. According to sources, till date there are no plans on the part of the apex bank to extend the last date of the scheme. “It is more of a political decision than a financial decision”, senior bank officials added. The RBI has recently held a review of the scheme.

According to sources in the banking sector, the apex bank was of the opinion that though the scheme is doing well the recovery under the scheme has till date fallen short of expectations.

According to senior officials in PSU banks, most of the big defaulters are not in a position to raise the amount of money needed for the one time settlement. Since the big defaulters are not being able to raise the amount of money needed to avail of the scheme, they are demanding more time.

Under the scheme, there is a provision that the defaulters can pay 25 per cent of the amount in one go and pay the rest over a period of one year.

The banks would, however, charge an interest rate at the level of the prime lending rate (PLR) during this one year period. Hence, the scheme is not doing well in terms of volume as it should have done, senior bank officials added.