Every Developed Nation Has the Problem of NPAs: SBI Chief Rajnish Kumar

News18.com
Speaking at the Rising India Summit, SBI chairman Rajnish Kumar citing the example of Japan said every developing nation has had the problem of NPAs and India is not the only one facing the issue.

New Delhi: Speaking at the Rising India Summit, SBI chairman Rajnish Kumar citing the example of Japan said every developing nation has had the problem of NPAs and India is not the only one facing the issue.

"There is no global power that did not face the problem of NPAs. Take Japan, for example. Of course there is a need to work on it but we need to address the issue based on proper decisions and not rush into it," said Rajnish Kumar, chairman, SBI.

According to a written response by Finance Minister Arun Jaitley in the Lok Sabha on 11 August 2017, the gross NPAs of public sector banks increased by 311.22% from Rs.1,55,890 crore in 2013 to Rs.6,41,057 crore in 2017.

The total NPA ratio as a percentage of total assets in the country rose from 3.84% to 12.47%.

Similarly, the gross NPAs of private banks grew by 269.47% from Rs. 19,986 crores in 2013 to Rs.73,842 crores in 2017.

The SBI also said that there is lot to thank the public sector banks for. "Firstly, when you drive on a highway, enter an airport or feel good about the power situation, do not forget the bank. Let us understand the importance of public sector banks," said Kumar.

The Financial Stability Report released in 2017 by the Reserve Bank of India states that India’s total NPA stands at 9.6%.

The report also stated that India has one of the highest ratio of NPAs among the major economies of the world, second only to Italy, with 16.4%.

According to a report by IMF, China has only 1.7% NPAs.

The RBI’s Financial Stability Report states that the basic metals and cement industries are the most indebted, with 45.8% and 34.6% stressed assets respectively.

Talking on the subject of ownership and whether privatisation of banks would help solve the problem of NPAs, he said, "Ownership should not matter. Whether it be private or public it is all about ethics."