NEW DELHI: As many as 14 out of the 21 public sector banks added a staggering `2.17 lakh crore worth bad loans in just one year. Total bad loans of PSBs is expected to further increase as seven more state-run lenders are yet to publish their annual results.In just one quarter, ie., between January and March, these 14 banks added a whopping `92,623 crore to the total gross NPAs. Overall, 26 scheduled commercial banks that have announced annual results together added `2.5 lakh crore to the gross NPA pile during FY18.
In other words, gross NPAs of 26 lenders (14 public sector banks and 12 private banks) shot up 52 per cent at `7.31 lakh crore in FY18 as against `4.8 lakh crore a year before, according to data compiled by Care Ratings.The 12 private lenders together added `31,961 crore to their collective toxic loan pile (38 per cent increase) during FY18 over the previous fiscal. During the March quarter, they added `18,000 crore over the previous quarter. On the other hand, public sector banks’ bad loans doubled in FY18 at `6.2 lakh crore compared to `3.9 lakh crore in FY17.
Interestingly, gross NPAs rose during the March quarter after a period of moderation, which experts believe is due to the Reserve Bank of India’s controversial February, 12 circular, which tightened NPA recognition norms. The ratio of bad loans to total advances of all 26 banks moderated from 9.04 per cent in June, 2017 to 8.93 per cent in September, 2017. However, it jumped to 10.14 per cent in March, 2018.
Among the 14 public sector banks , the ratio increased from 9.94 per cent in March, 2017 to 13.41 per cent a year later, a steep increase of 163 bps.
While 12 PSBs had gross NPA ratios above 10 per cent, five pr ivate lenders registered loan ratios of less than 2 per cent, while another five of them had ratios between 2 and 5 per cent. Total provisions made during the year increased from `43,611 crore to `1,05,150 core, an increase of 141 per cent, the data shows.