(a) whether some public sector banks have decided to take proactive steps to
prevent burgeoning of NPAs and also to upgrade the existing substandard assets into
standard assets;
(b) if so,the details thereof;
(c) the reasons for not taking such steps by all public sector banks;
(d) whether NPAs of each of the public sector banks as on March 31, 2000 have been
worked out; and
(e) if so, the details thereof, bank-wise?
THE MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI V. DHANANJAYA KUMAR) :
(a) to (e) A statement is laid on the Table of the House.
Statement
(a) to (c) In order to prevent standard assets from becoming sub-standard assets, some
public sector banks have taken pro-active steps. These include putting account under
special watch if the accounts is irregular at the end of one quarter, credit audit and
scanning of the economic environment to look at likely sector related causes for possible
slippage of accounts into non-performing assets. These steps are being taken by an increasing
number of banks. The steps taken by Public Sector Banks, Reserve Bank of India and Government
of India, not only to recover Non Performing Assets {NPAs) but also to check the fresh
incidence of NPAs include inter-alia the preparation of a documented loan recovery policy,
upgrading credit appraisal skills of the officers by imparting training, etc; strengthening
post-sanction follow up and monitoring of performance of accounts at all levels, reduction
through negotiated settlement ensuring maximum recovery at minimum cost, strengthening and
effectively utilizing the debt recovery tribunal mechanism, setting up of Settlement
Advisory Committees headed by a retired Judge of High Court in some banks for settling
accounts of large and medium industrial borrowers, Settlement Advisory Committees of
executives for settling loans and focusing on recovery by setting up recovery cells at
Head Offices, etc.
(d) and (e) NPAs of public sector banks as on 31.3.1999 (latest available) were
Rs. 51710.50 crore constituting 15.89% of the gross advances, whereas net NPAs were
Rs. 24211-49 crore representing 8.13% of the net advances.