Thursday, January 26, 2017

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 NameTotal Loans (Crores)NPA (Crores)NPA Ratio %
State Bank of India1193325931377.8%
Punjab National Bank3569585500315.4%
Bank of India2743914393516%
Bank of Baroda2691153560413.23%
Canara Bank311615304809.78%
Indian Overseas Bank1492173023920.2%
Union Bank of India2429352556010.5%
Central Bank of India1857192510713.5%
IDBI Bank Limited2023042172410.7%
UCO Bank1151662149518.66
Allahabad Bank1453281876912.9%
Corporation Bank1427871572611%
Andhra Bank1372281413710.3%
Syndicate Bank167759134758%
Bank of Maharashtra1031481304012.6%
State Bank of Patiala852391136513.33%
United Bank of India707811010414.27%
Dena Bank81114963611.87%
State Bank of Hyderabad11242094368.39%
Indian Bank12217386907.11%
Vijaya Bank9019965897.3%
State Bank of Travancore6827664019.37%
Jammu & Kashmir Bank Ltd.5064047159.31%
State Bank of Bikaner & Jaipur7403345936.2%
Punjab & Sind Bank6313445667.2%
State Bank of Mysore5522843237.8%
IDFC Bank Limited4971430306.09%
Federal Bank Ltd.5940817472.94%
South Indian Bank Ltd.4170516523.96%
Karnataka Bank Ltd.3541213893.9%
IndusInd Bank Ltd.936678619.19%
City Union Bank Ltd.212165552.6%
Tamilnad Mercantile Bank Ltd.223294892.19%
Catholic Syrian Bank Ltd.78594555.8%
DCB Bank Ltd134642311.7%
Bharatiya Mahila Bank Ltd.62730.4%
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.

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