NEW DELHI: More than half of the country’s banks have reported a fall in Non-Performing Assets (NPAs) in January-June this year, indicating stability in the credit environment, finds the latest FICCI-IBA survey. A total of 23 banks including public sector, private sector, foreign and small finance banks, representing over 67 per cent of the banking industry, participated in the survey.
About 52 per cent of the respondent banks reported a fall in NPAs, significantly higher than 43 per cent in the previous round. Infrastructure, metals and engineering goods were key contributors to bad debt. About 55 per cent of the public sector banks (PSB) cited a reduction in NPA levels. However, only 29 per cent banks reported a rise in the number of requests for restructuring of loans.
“For the financial sector, participating bankers were of the opinion that there should be capital infusion in PSBs and measures should be taken to address the stress in the NBFC sector,” the survey said. Some of the key sectors that are expected to see higher credit in the next six months are infrastructure, metals, real estate, automobile and auto components, pharmaceuticals and food processing, it added.
To facilitate credit growth and investment pick-up in the economy, bankers recommended accelerated investments in the infrastructure sector as well as interest subvention for investments in long gestation infrastructure projects.