The Telegraph
Since 1st March, 1999
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Banks have cut down sticky assets to 5.9%

Mumbai, Aug. 30 (PTI): The Reserve Bank of India today said that scheduled commercial banks (SCBs) have reduced their net non-performing assets (NPAs) to 5.9 per cent as on March 31, 2002 compared with 6.2 per cent at the end of fiscal 2000-01.

The ratio of gross NPAs to gross advances of these banks was down to 10.8 per cent as on March 31 as against 11.4 per cent for 2000-01, RBI said in its annual report.

However, the performance of financial institutions on NPAs front was at odds with banks in 2001-02. The ratio of net NPAs to net loans of 10 FIs grew to 8.8 per cent for fiscal 2001-02 from 8.6 per cent at the end of March 31, 2001, it said.

Bank group wise, the ratio of net NPAs to net advances was highest for the old private banks (those set up before 1991) at 7.5 per cent while it was lowest for the foreign banks at 1.8 per cent, the RBI said.

The ratio of gross NPAs to total assets for SCBs stood at 4.8 per cent as on March 31 2002 (4.9 per cent for 2000-01) and that of net NPAs to total assets was 2.6 per cent (2.5 per cent), it said.

The majority of SCBs — 74 out of 97 banks — have recorded net NPAs within 10 per cent of their net advances for 2001-02, it said.

SCBs’ financial performance in 2001-02 with their ratio of net profits to total assets rose to 0.8 per cent from 0.5 per cent for 2000-01, the RBI added.

Total income and expenditure as a percentage of their total assets amounted to 10 per cent (10.2 per cent for fiscal 2000-01) and 8.2 per cent (9.7 per cent), respectively, it said.

On capital adequacy, RBI said all FIs, except IFCI Ltd, had a capital to risk-weighted assets ratio (CRAR) much above the stipulated norms at the March-end, 2002.

The RBI said, “There are a few areas regarding efficiency of the Indian banking system — rather than its stability — that raise concerns, especially in an uncertain economic envirnoment. The level of NPAs continues to remain high.”

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