Banks should contain NPA: FM
New Delhi: Expressing concern over rising bad loans with public sector lenders, Finance Minister Pranab Mukherjee on Friday asked them to devise strategies for containing and bringing down non-performing assets (NPAs).
“Of course, it is an area of concern as gross NPAs have increased from March 2010 to March 2011. Gross NPAs have increased from Rs 59,927 crore to 74,617 crore,” Mukherjee said after meeting heads of public sector banks here.
He noted that state-owned banks have witnessed significant credit growth of 22.44 per cent in the last financial year. However, there has been a moderation in the last quarter.Considering that the investment needs of the infrastructure sector are increasing, he said, banks need to sustain and improve the flow of credit to the sector. On the farm sector loan, Mukherjee said, against the target of flow of Rs 3,75,000 crore as agricultural credit in 2010-11, the achievement has been over Rs 4,46,000 crore.
While the overall progress of agricultural credit was a matter of satisfaction, a few banks have failed to meet this obligation, he said. He expected these banks to focus attention on this important aspect and show visible signs of improvement.