Lok Sabha Question No. 1736 (UNSTARRED), answered on 2023-07-31
Subject: Decline in the NPA
Ministry: FINANCE
Asked by: Shankar Lalwani, Bharatiben Dhirubhai Shyal, Adala Prabhakara Reddy, Arvind Kumar Sharma

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF FINACIAL SERVICES

## LOK SABHA

## UNSTARRED QUESTION NO†17 36 ANSWERED ON 31 st  JULY, 2023 / SRAVANA 9, 1945 (SAKA)

## DECLINE IN THE NPA

†17 36. SHRI SHANKAR LALWANI DR. BHARATIBEN DHIRUBHAI SHIYAL SHRI ADALA PRABHAKARA REDDY DR. ARVIND KUMAR SHARMA

Will the Minister of FINANCE be pleased to state:-

- (a) whether there has been continuous decline in the NPA (Non-Performing Assets) of banks;
- (b) if so, the bank-wise details during the last three years;
- (c) the details of the various steps being taken/likely to be taken to reduce the NPA in the Indian Banking System and dispose of the matters lying pending since long time;
- (d) the progress made under the same and the benefits realised so far; and
- (e) the  details  of  the  progress  made  with  respect  to  the  implementation  of  Mission Indradhanush for Public Sector Banks (PSBs)?

## ANSWER

## THE MINISTER OF STATE IN THE MINISTRY OF FINANCE

## (DR. BHAGWAT KARAD)

- (a) to (d): The Gross NPAs of Scheduled Commercial Banks (SCBs) have declined in the last  six  financial  years  from  Rs.  10,36,187  crore  (gross  NPA  ratio  of  11.18%)  as  on 31.3.2018  to  Rs.  5,71,515  crore  (gross  NPA  ratio  of  3.87%)  as  on  31.3.2023  (RBI provisional data). Bank-wise details of gross NPAs of SCBs during the last three financial years are at Annex .

Comprehensive steps have been taken to recover and to reduce NPAs, enabled by which SCBs have made an aggregate recovery of Rs. 8,19,211 crore in NPAs, including writtenoff loans, during the last six financial years (RBI provisional data for FY 2022-23). These steps include, inter alia , the following:

- (1) Change in credit culture has been effected,  with IBC fundamentally  changing the creditor-borrower relationship, taking away control of the defaulting company from promoters/owners, and debarring wilful defaulters from the resolution process. To make the process more stringent, personal guarantor to corporate debtor has also been brought under the ambit of IBC.
- (2) The  Securitisation  and  Reconstruction  of  Financial  Assets  and  Enforcement  of Security Interest Act, 2002 has been amended to make it more effective.
- (3) Pecuniary jurisdiction of Debt Recovery Tribunal (DRTs) was increased from Rs. 10 lakh to Rs. 20 lakh to enable the DRTs to focus on high value cases resulting in higher recovery for the banks and financial institutions.
- (4) Under  the  PSB  Reforms  Agenda,  comprehensive  and  automated  Early  Warning Systems (EWS) were instituted in PSBs, with ~80 EWS triggers and use of thirdparty data for time-bound remedial actions in the borrowing accounts.
- (5) PSBs have also created Stressed Asset Management Verticals for stringent recovery, segregated preand post-sanction follow-up roles for clean and effective monitoring, and engaging specialised monitoring agencies for monitoring of largevalue accounts.
- (6) Wilful  defaulters  are  not  sanctioned  any  additional  facilities  by  banks  or  financial institutions, and their unit is debarred from floating new ventures for five years.
- (7) Wilful defaulters and companies with wilful defaulters as promoters/directors have been debarred from accessing capital markets to raise funds.
- (8) Prudential Framework for Resolution of Stressed Assets was issued by RBI in 2019 to provide a framework for early recognition, reporting and time bound resolution of  stressed  assets,  with  a  build-in  incentive  to  lenders  for  early  adoption  of  a resolution plan.

(e): Government, launched 'Indradhanush' scheme in August 2015 for comprehensive framework to revamp and improve Public Sector Banks (PSBs), and had implemented structural and policy changes, which include:

- (1) Financial Services Institutions Bureau (erstwhile Bank Board Bureau established in 2016) has been constituted for arm's length selection of top management in PSBs.
- (2) The post of Chairman and Managing Director has been separated into posts of MD & CEO and non-executive chairman to ensure appropriate checks and balances.
- (3) Capital  infusion  has  been  done  in  banks  to  supplement  the  achievement  of regulatory capital norms by PSBs through their own efforts and, in addition, based on performance and potential, augmenting their growth capital.
- (4) The Government has issued a circular for non- interference from Government and banks to take their decision independently keeping the commercial interest of the organisation in mind.
- (5) Revised framework of Key Performance Indicators (KPIs) for whole time directors has been introduced, and
- (6) Banking reforms, including EASE reforms, have been initiated to  address various issue,  which  include, inter  alia credit  discipline,  strengthening  of  risk  management practices,  responsible  lending,  improved  governance,  adoption  of  technology, enabling customer centricity and supporting financial inclusion.

As a result of Indradhanush Scheme and other reforms, implemented by the government, performance of PSBs has significantly improved. All PSBs are in profit and adequately capitalised,  and  asset  quality  and  provisioning  coverage  ratio  of  PSBs  have  improved significantly.  Also,  all  PSBs,  earlier  placed  under  Prompt  Corrective  Action  (PCA) framework by RBI has been removed from PCA restriction.

## Lok Sabha unstarred question no. †1736, regarding DECLINE IN THE NPA

## Details of gross non-performing assets (NPAs) of Scheduled Commercial Banks (SCBs) during the last three financial years

Amounts in crore Rs.

|                                                   | Gross NPAs      | Gross NPAs      | Gross NPAs      |
|---------------------------------------------------|-----------------|-----------------|-----------------|
| Bank                                              | As on 31.3.2021 | As on 31.3.2022 | As on 31.3.2023 |
| American Express Banking Corporation              | 253             | 227             | 288             |
| AU Small Finance Bank Limited                     | 1,503           | 924             | 981             |
| Australia and New Zealand Banking Group Limited   | 25              | 25              | -               |
| Axis Bank Limited                                 | 22,682          | 18,566          | 17,019          |
| Bandhan Bank Limited                              | 5,758           | 6,380           | 5,299           |
| Bank of Bahrain and Kuwait B.S.C.                 | 14              | 17              | 18              |
| Bank of Baroda                                    | 66,671          | 54,059          | 36,764          |
| Bank of Ceylon                                    | 33              | 54              | 50              |
| Bank of India                                     | 56,535          | 45,605          | 37,686          |
| Bank of Maharashtra                               | 7,780           | 5,327           | 4,334           |
| Bank of Nova Scotia                               | 64              | 64              | 0               |
| Barclays Bank PLC                                 | 268             | 111             | 32              |
| BNP Paribas                                       | 7               | 6               | -               |
| Canara Bank                                       | 60,288          | 54,436          | 46,160          |
| Capital Small Finance Bank Limited                | 78              | 117             | 153             |
| Central Bank of India                             | 29,277          | 28,156          | 18,386          |
| Citibank N.A.                                     | 991             | 759             | 207             |
| City Union Bank Limited                           | 1,893           | 1,933           | 1,920           |
| Cooperatieve Rabobank U.A.                        | 372             | 150             | 104             |
| Credit Agricole Corporate and Investment Bank     | 3               | 3               | 3               |
| CSB Bank Limited                                  | 393             | 290             | 263             |
| CTBC Bank Company Limited                         | 2               | 1               | 1               |
| DBS Bank India Limited                            | 488             | 4,534           | 2,743           |
| DCB Bank Limited                                  | 1,083           | 1,290           | 1,123           |
| Deutsche Bank AG                                  | 1,457           | 2,732           | 1,748           |
| Doha Bank Q.P.S.C                                 | 27              | 27              | 27              |
| Equitas Small Finance Bank Limited                | 643             | 837             | 724             |
| ESAF Small Finance Bank Limited                   | 564             | 950             | 352             |
| Federal Bank Limited                              | 4,602           | 4,137           | 4,184           |
| Fincare Small Finance Bank Limited                | 354             | 573             | 288             |
| FirstRand Bank Limited                            | 28              | -               | -               |
| HDFC Bank Limited                                 | 14,999          | 16,101          | 18,012          |
| Hongkong and Shanghai Banking Corporation Limited | 913             | 644             | 524             |
| ICICI Bank Limited                                | 40,841          | 33,295          | 29,986          |
| IDBI Bank Limited                                 | 36,212          | 34,115          | 10,969          |
| IDFC First Bank Limited                           | 4,303           | 4,469           | 3,884           |
| Indian Bank                                       | 38,455          | 35,214          | 28,180          |

|                                       | Gross NPAs      | Gross NPAs      | Gross NPAs      |
|---------------------------------------|-----------------|-----------------|-----------------|
| Bank                                  | As on 31.3.2021 | As on 31.3.2022 | As on 31.3.2023 |
| Indian Overseas Bank                  | 16,323          | 15,299          | 14,072          |
| IndusInd Bank Limited                 | 5,795           | 5,517           | 5,826           |
| Jammu a Kashmir Bank Limited          | 6,955           | 6,521           | 5,204           |
| Jana Small Finance Bank Limited       | 858             | 757             | 709             |
| Karnataka Bank Limited                | 2,588           | 2,251           | 2,293           |
| Karur Vysya Bank Limited              | 4,143           | 3,431           | 1,458           |
| KEB Hana Bank                         | 40              | 40              | 40              |
| Kotak Mahindra Bank Limited           | 7,426           | 6,470           | 5,768           |
| Lakshmi Vilas Bank Limited            | 4,845           | -               | -               |
| Mizuho Bank Limited                   | 6               | 6               | 6               |
| Nainital Bank Limited                 | 651             | 521             | 448             |
| North East Small Finance Bank Limited | 192             | 190             | 347             |
| PT Bank Maybank Indonesia TBK         | 18              | -               | -               |
| Punjab and Sind Bank                  | 9,334           | 8,565           | 5,648           |
| Punjab National Bank                  | 1,04,423        | 92,448          | 77,328          |
| Qatar National Bank (Q.P.S.C.)        | 50              | 53              | 52              |
| RBL Bank Limited                      | 2,602           | 2,728           | 2,420           |
| Sberbank                              | 92              | 41              | 22              |
| SBM Bank (India) Limited              | 88              | 93              | 97              |
| Shinhan Bank                          | 128             | 154             | 156             |
| Shivalik Small Finance Bank Limited   | -               | 33              | 33              |
| Societe Generale                      | 79              | 79              | 79              |
| Sonali Bank                           | 4               | 4               | 4               |
| South Indian Bank Limited             | 4,143           | 3,648           | 3,708           |
| Standard Chartered Bank               | 4,674           | 3,886           | 3,233           |
| State Bank of India                   | 1,26,389        | 1,12,023        | 90,928          |
| Suryoday Small Finance Bank Limited   | 394             | 598             | 191             |
| Tamilnad Mercantile Bank Limited      | 1,085           | 571             | 521             |
| The Dhanalakshmi Bank Limited         | 657             | 534             | 511             |
| UCO Bank                              | 11,352          | 10,237          | 7,726           |
| Ujjivan Small Finance Bank Limited    | 1,071           | 1,284           | 631             |
| Union Bank of India                   | 89,788          | 79,587          | 60,987          |
| United Overseas Bank Limited          | 75              | 75              | 55              |
| Unity Small Finance Bank Limited      | -               | -               | 3,767           |
| Utkarsh Small Finance Bank Limited    | 315             | 648             | 432             |
| Woori Bank                            | -               | -               | 8               |
| Yes Bank Limited                      | 28,610          | 27,976          | 4,395           |

Source: RBI (provisional data for 31.3.2023)

*****