The NPA Problem in Indian Banks

The Banking industry in India has always been one of the most favoured in our country thanks to solid and stellar numbers declared year after year. But, if you take the last year 2016 and dig a little deeper into the numbers, there is one glaring problem that has come out – Non Performing Assets or NPA’s. In layman terms an NPA refers to a Bad Loan that has defaulted. Would these NPA’s push the Indian Banking Scene into a Major Crisis? That’s what you will find out in this article…

Year 2016 – The Increasing NPAs  

The Banks in India are currently reeling under a lot of pressure. The amount of NPAs on their books is steadily on the rise with 2016 seeing never before seen rise in NPAs. Look at the chart below for the quarterly growth of NPAs from Dec 2013 until June 2016 (Because official statistics for Q3 and Q4 of 2016 are not available on the web yet)

In just the first half of 2016 the NPAs have gone up by around 2 lakh crores. Don’t be surprised, the numbers below are not exaggerations or made up. They are the actual stats released by RBI and as of June 2016 the total outstanding bad loans on the books of Banks in India is more than 6 lakh crores.

If we dig a little deeper and try to understand on a per bank basis, no surprises there either. State Bank of India, the largest bank in our country has about 93,137 crores as NPAs. Though this is a huge number, it translates to around 8% of the total loans granted by SBI. That is a whole lot of bad loans isn’t it?

Even though SBI is the highest in sheer NPA value, the worst in terms of % is Indian Overseas Bank. Even though their total outstanding NPAs is 30,239 crores, it translates to 20.27% of all its loans. This means 1 in 5 rupees given out by IOB as a Loan is an NPA. A very close second is UCO Bank with 21,495 crores in NPA which translates to 18.66% of its loans. In third place is Bank of India with 43,935 crores in NPA which translates to 16% of its loans.

Look at the table below and you will be able to see the bank wise stats in terms of their total loans in rupees, the NPA as well as the % of NPAs.

Bank Name	Total Loans (Crores)	NPA (Crores)	NPA Ratio %
State Bank of India	1193325	93137	7.8%
Punjab National Bank	356958	55003	15.4%
Bank of India	274391	43935	16%
Bank of Baroda	269115	35604	13.23%
Canara Bank	311615	30480	9.78%
Indian Overseas Bank	149217	30239	20.2%
Union Bank of India	242935	25560	10.5%
Central Bank of India	185719	25107	13.5%
IDBI Bank Limited	202304	21724	10.7%
UCO Bank	115166	21495	18.66
Allahabad Bank	145328	18769	12.9%
Corporation Bank	142787	15726	11%
Andhra Bank	137228	14137	10.3%
Syndicate Bank	167759	13475	8%
Bank of Maharashtra	103148	13040	12.6%
State Bank of Patiala	85239	11365	13.33%
United Bank of India	70781	10104	14.27%
Dena Bank	81114	9636	11.87%
State Bank of Hyderabad	112420	9436	8.39%
Indian Bank	122173	8690	7.11%
Vijaya Bank	90199	6589	7.3%
State Bank of Travancore	68276	6401	9.37%
Jammu & Kashmir Bank Ltd.	50640	4715	9.31%
State Bank of Bikaner & Jaipur	74033	4593	6.2%
Punjab & Sind Bank	63134	4566	7.2%
State Bank of Mysore	55228	4323	7.8%
IDFC Bank Limited	49714	3030	6.09%
Federal Bank Ltd.	59408	1747	2.94%
South Indian Bank Ltd.	41705	1652	3.96%
Karnataka Bank Ltd.	35412	1389	3.9%
IndusInd Bank Ltd.	93667	861	9.19%
City Union Bank Ltd.	21216	555	2.6%
Tamilnad Mercantile Bank Ltd.	22329	489	2.19%
Catholic Syrian Bank Ltd.	7859	455	5.8%
DCB Bank Ltd	13464	231	1.7%
Bharatiya Mahila Bank Ltd.	627	3	0.4%

Disclaimer: All statistics were taken from the internet and the author does not guarantee the accuracy of the same or assume any liability owing to them being incorrect. This is not a politically motivated post and hence please avoid comments supporting or blaming any political party in this blog.