Bad loans & they have become only worse for banks
The gross non-performing assets of
scheduled commercial banks have zoomed 10 times in the last ten fiscal years.
In FY16, the stressed assets of these banks were a whopping Rs 5.41 lakh crore.
Rewind a decade. It was a mere Rs 51,000 crore in FY06.
The gross non-performing assets of
scheduled commercial banks have zoomed 10 times in the last ten fiscal
years. In FY16, the stressed assets of these banks were a whopping Rs 5.41 lakh
crore. Rewind a decade. It was a mere Rs 51,000 crore in FY06.
The banks' reporting of bad loans increased in the last two years or so after former RBI Governor Raghuram Rajan had ordered them to recognise their stressed assets.
Rajan had set a March 2017 deadline for the lenders to fully disclose their bad loans and make adequate provisions. And it explains why just in the last fiscal year, immediately following the order, the gross non-performing assets of these banks rose 67 percent in FY16 from the year before.
The banks' reporting of bad loans increased in the last two years or so after former RBI Governor Raghuram Rajan had ordered them to recognise their stressed assets.
Rajan had set a March 2017 deadline for the lenders to fully disclose their bad loans and make adequate provisions. And it explains why just in the last fiscal year, immediately following the order, the gross non-performing assets of these banks rose 67 percent in FY16 from the year before.
The graph below shows the mess the
PSU banks are in.
Happy Investing
Source:Moneycontrol.com
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