Farm, industrial sectors account for most of the bad loans: RBI report

BL Chennai 1 Jan 2014

The growing share of bad loans is causing enough worry to India’s Rs 81-lakh crore 

banking sector, shows the RBI’s latest Financial Stability Report.

According to the half-yearly report, gross non-performing assets (NPAs) are likely to go up to 4.6 per cent of total loans by September 2014 from 4.24 per cent this September — from Rs 1.67-lakh crore to Rs 2.29-lakh crore.

In terms of gross NPAs, agriculture has the highest ratio at 5.5 per cent at end-September 2013. The sector is followed by industries at 4.9 per cent.

Industries posted the highest share in re-jigged advances, 10.9 per cent at end-September. Industries contributed the highest share of stressed advances in their loans portfolio — 15.9 per cent at end-September — followed by services at 7.6 per cent.

Loans in retail fared much better. Its share in gross NPAs stood at 2.2 per cent, while restructured standard advances to total advances were 0.3 per cent at end-September.

Incidentally, the new private sector banks, with the largest share of the retail segment in their loans portfolio, around 30 per cent, seemed to have benefited in terms of better asset quality relative to other bank-groups, shows the RBI report.

Public sector banks have the lowest share of the retail segment in their loans portfolio — around 16 per cent.