Project delays driving banks’ NPAs: Govt

The government said factors like the economic slowdown,sluggish bank credit growth and delays in project implementation were driving up the bad loans of lenders.

“The increase in NPAs,in absolute terms,may be broadly on account of the consolidated impact of business cyclicality,economic slowdown,delay in implementation of projects and consequent repeated restructuring of accounts by banks,credit growth across the banking industry during the last few years,” Minister of State for Finance Namo Narain Meena told the Rajya Sabha in a written reply.

The ratio of gross non-performing assets (NPAs) to gross advances of public sector banks (PSBs) increased from 2.27 per cent as of March 31,2010,to 2.31 per cent on March 31,2011,the minister said.

The minister said,however,the rate of increase of NPAs moderated to 24 per cent during the year 2010-11,compared to 30.1 per cent during 2009-10.