NPA provisioning of SBI increased three-fold between 2008-2011

Source:DRG TUESDAY, 30 AUGUST 2011 17:30

Rising bad debt has forced State Bank of India (SBI) to increase its provisioning more than 

three-fold to Rs 8,792 crore in 2010-11 from Rs 2,474 crore in 2008-09 informed the 

government.

 

Finance Minister Pranab Mukherjee while addressing through a written reply to a question raised in the Rajya Sabha said, this provision in 2010-11 includes a counter cyclical buffer of Rs 2,330 crore toward achieving the 70 per cent Provision Coverage Ratio prescribed by the Reserve Bank of India over-and-above the prudential provision.

The NPAs have gone up substantially in agriculture, small scale industries and corporates, he said. 

 

While naming the defaulter companies, he informed that, in the year 2010-11, outstanding loans of Rs 210.34 crore given by SBI to Shah Alloys Ltd turned into NPAs. At the same time, an outstanding loan of Rs 193.99 crore to Indorama Synthetics became a NPA.

 

The government has received a proposal from SBI for raising capital through various instruments -- Qualified Institutional Placement (QIP), Preferential Allotment, a Follow-On Public Offer and a rights issue. The proposal is under examination, said Minister of State for Finance Namo Narain Meena.