Be vigilant on quality of loan portfolio: FM to banks

Voicing the governments concerns over declining asset quality and rising non-performing assets in the banking sector.

Voicing the governments concerns over declining asset quality and rising non-performing assets (NPAs) in the banking sector,Finance Minister Pranab Mukherjee on Wednesday asked banks to keep a strict vigil on the quality of their loan portfolio.

He said that turbulence in the global financial markets has led the country to a situation of high inflation and a rising interest rates regime,which in turn impacts loan portfolios.

These are turbulent times and we should watch every step that we take, Mukherjee said at the 106th foundation day ceremony of Bank of India. He said that while the global economy is still trying to cope with the after effects of the financial crisis,it should not prevent us from taking bold and innovative steps.

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The government has been keeping strict tab on the NPA situation in public sector banks in its quarterly reviews for the past few months and is likely to take stock of the progress made by banks on managing NPAs in the next review scheduled for September 17.

On skilled human resource crunch being faced by public sector banks,Mukherjee said the sector was facing two kinds of problems when it comes to hiring fresh talent.

Getting the right talent is one part of the problem. The other part is to inculcate the organisational culture amongst the new recruits so that their integration with the organisation becomes truly seamless.

Banking has emerged as a complex and knowledge based sector in the past few years with there being a constant need to train people and groom them for further leadership roles,he added.

Regarding the recent criminal activities carried out by the gang, ADG Krishnan said that one Aditya Kumar was shot dead by Ranjan Pathak and his associates on July 18 in the Bajpatti police station area.

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