New Delhi : Terming NPAs at 5.2 per cent as high, Finance Minister Arun Jaitley said it’s too early to consider the improvement in the bad loan situation last quarter as a “turnaround” and was keeping his fingers crossed. “I would take it (drop in March quarter NPAs) only as an initial indicator. At times, when you try to revive the economy, some indicators can always be patchy…I am not drawing any final conclusion from this,” Jaitley said.
“If this pattern continues over 2-3-4 quarters, then I will draw a conclusion that there is a pattern. I am keeping my fingers crossed,” he said.
Non-performing assets or bad loans of the total advances had reached a high of 5.64 per cent but period ending March “it has come down to 5.2 per cent…these (5.2 per cent NPA) are also high”, he said. From the decline in one quarter it cannot be concluded that this was a turnaround, he said.
As of December 2014, gross NPAs of PSU banks were at Rs 2,60,531 crore or 5.6% of total advances.
Echoing similar views, the Reserve Bank Governor Raghuram Rajan had said last week that there was no danger of any financial crisis but it may be early to declare that the worst was over on NPA front. The Governor said resolution of NPAs will be possible only with higher economic growth, which he termed as “slow” and the actions which the banks take.
Jaitley also said the government has proposals of over 500 bln rupees already in the pipeline for disinvestment. “I have already indicated that some ministries have approached me with regards to non-core sectors to consider whether some of their units could be disinvested. And I am particularly referring to the hotels which are left,” he said. As part of its disinvestment plan this year, the government has proposed to make strategic sales worth 285 bln rupees by March 2016.
