STOCK MARKET BSE NSE

Steel Sector Accounts for Biggest Chunk of NPAs: Jaitley in LS

Some loans which have turned bad might have been given on a wrong basis, such cases will be investigated, Jaitley said.

Published: 05th May 2016 04:15 PM  |   Last Updated: 05th May 2016 04:16 PM   |  A+A-

Jaitley_PTI

Union Finance Minister Arun Jailtey meets the press during Assembly Election at Press Club in Kolkata. |PTI

NEW DELHI: The steel industry accounts for the largest proportion of the banks' non-performing assets (NPAs), Finance Minister Arun Jaitley told the Lok Sabha on Thursday.

"The biggest contributor in the NPAs is steel sector. Because if our companies will not be able to sell their steel, it is obvious that they will not be able to repay bank loan and the interest upon it," Jaitley said. 

Weakened by the dumping into India of Chinese steel at below cost-level prices, the sector has in turn affected the banks' balance sheets, he said.

"When the business cycles are weak in some sectors during global headwinds, then not only the sector goes weak, but it affects the banks' balance sheets. It is called twin balance sheet problem," Jaitley said.

Some loans which have turned bad might have been given on a wrong basis, and such cases will be investigated, the minister said.

"(Out of) the current NPAs ... there are some which have been given on a wrong basis. It will be investigated into ... I do not want to go into the details of who was responsible for the same," he said.

Jaitley said the government was committed to bringing the banks out of the financial crisis and the NPA issue can be resolved only if the bad assets are reflected properly on the balance sheets, and not kept hidden. 

The top 50 defaulters of public sector banks had exposure in excess of Rs 1.21 lakh crore as on December 2015, the Minister of State for Finance Jayant Sinha had told Parliament on Tuesday. 

Jaitley said: "We are working upon making laws for the banks to deal with the current situation of rising NPAs. Bankruptcy Bill has already been tabled in the Parliament."

The finance minister also said that the below average monsoon had an impact on the economy in the last two years and an expected normal monsoon this year will revive rural economy. 



Comments

Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the newindianexpress.com editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on newindianexpress.com are those of the comment writers alone. They do not represent the views or opinions of newindianexpress.com or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. newindianexpress.com reserves the right to take any or all comments down at any time.

flipboard facebook twitter whatsapp