The financial year just ended had seen a sharp increase in bad loans including car loans due to the economic slowdown. This year banks are optimistic about delivering an improved performance due to better economic situation and repayment behavior.
In the last year, PSU banks reported large number of bad loans. State Bank of India posted the steepest increase in NPAs.
SBI’s gross NPAs went up by Rs 3,820 crore to Rs 19,534 crore by March end. Bank of India’s bad loans nearly doubled to Rs 4,882 crore for the 12 months ending March 31. 2010.
The performance of private banks was not as bad as the public ones. ICICI and HDFC Bank displayed just a slight reduction in NPAs.
Gross bad loans of ICICI Bank fell to Rs 9,480 crore at end-March, from Rs 9,649 crore last year and for HDFC Bank, they declined to Rs 1,816 crore from Rs 1,988 crore.
The declines last year can be primarily credited to corporate and small and medium size enterprises.
A top Bank of India official said, “We do not expect in FY-11 a repeat of the huge additions (absolute) to bad loans that happened in 2008-09 and 2009-10. The business environment is looking up, which will improve the repayment capability of some NPA accounts. Also, some loans for which full provisions are made would be written-off from the books.”
Get the best deals on loan offers
Some useful personal finance calculators
Also Read: