Bad debts of public sector banks surged to 5.32 per cent at the end of September 30 from 4.82 per cent on September 30, 2013.

Bad debts are technically called non-performing assets or NPA. Rising NPA is one of the key issues which will be discussed in a meeting of the chiefs of public sector banks and financial institutions with Finance Minister Arun Jaitley on Thursday.

Sluggish growth According to the agenda circulated for the meeting, NPA has risen due to “sluggishness in domestic growth during the recent past, slowdown in recovery in the global economy and continuing uncertainty in the global markets.” NPAs in seven key industries, including coal and textiles, registered a surge during the period. However, iron and steel, construction, and aviation offered some respite. The amount of bad debt is indicated as a ratio to total advances.

Private banks The gross NPA of public sector banks on September 30 rose 19.41 per cent to over ₹2.43 lakh crore year-on-year. However, the increase is lower than that recorded in the previous year when bad debts rose by a whopping 41 per cent. Meanwhile, NPAs at private sector banks have come down to 2.04 per cent from 2.06 per cent last September.

Fourteen banks are laden with over 5 per cent NPAs. United Bank of India tops with over 11 per cent NPAs followed by Indian Overseas Bank with 7.19 per cent, Punjab National Bank with 6.45 per cent, IDBI Bank with 6.32 per cent, and Central Bank of India with 6.25 per cent. There are 12 banks with NPAs ranging between 3 per cent and 5 per cent. Vijaya Bank has 3.08 per cent, followed by Canara Bank with 3.36 per cent, Bank of India with 3.93 per cent, Syndicate Bank with 3.94 per cent and Indian Bank with 4.1 per cent. The meeting will also discuss the status of new projects that have approached banks for funds. From January 1 to September 30, public sector banks received 194 new projects and proposals (with investment of ₹250 crore and above in each project).

New projects These projects are in sectors such as power, cement, real estate, roads, automobiles, and oil, among others. These involve total investment of over ₹4.68 lakh crore.

So far, banks have sanctioned ₹60,572 crore, while over ₹11,000 crore have been disbursed.

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