According to a recent press report the government has reported that provisioning against the non-performing assets (NPAs) of State Bank of India (SBI) has increased more than three-fold to Rs 8,792 crore in 2010-11 from Rs 2,474 crore in 2008-09 due to a rise in bad debt.
Mr. Pranab Mukherjee, Finance Minister said that the provision in 2010-11 includes a countercyclical buffer of Rs 2,330 crore toward achieving the 70 per cent Provision Coverage Ratio prescribed by the Reserve Bank of India over-and-above the prudential provision,.
Reports said that the NPAs of the bank have gone up substantially in agriculture, small scale industries and corporates.
The finance minister said that the outstanding loans of Rs 210.34 crore given by SBI to Shah Alloys Ltd turned into NPAs and an outstanding loan of Rs 193.99 crore to Indorama Synthetics has also turned into a NPA.
Mr. Namo Narain Meena, Minister of State for Finance, said that the government has received a proposal from SBI for raising capital through various instruments like Qualified Institutional Placement (QIP), Preferential Allotment, a Follow-On Public Offer and a rights issue. He said that the proposal was under examination.
The NPA of the country’s largest lender well-known for its loans such as SBI Loan for Pensioners, SBI Recurring Deposits, Loan against Mortgage of Property, SBI Housing Loan, Loan against Shares & Debentures, SBI Car Loan, Rent Plus Scheme, SBI Educational Loan has increased more than three-fold to Rs 8,792 crore in 2010-11.