RBI says 36% of total bad loans from six key sectors

24082014

The Reserve Bank has said about 36 per cent of the overall 4.1 per cent bad assets in system have been created by six sectors of the economy – infrastructure, metals, textiles, chemicals, engineering and mining which have only 30 per cent of the credit share. The central bank, in its annual report for FY2013-14, said the gross non-performing assets ratio for the non-priority sector grew to 4 per cent as of March 2014 as against 3 per cent in the year ago period, while the same for priority sector stood stable at 4.4 per cent. It also said the contribution of mandatory priority sector loans to the overall bad assets have come down during the last fiscal.

The RBI said that the non-priority sector has contributed more in the deterioration of the loan asset quality of the banking sector in recent years. It further added that the contribution of Priority Sector Lending (PSL) loans to the overall bad loans narrowed to 36 per cent as of FY’14 from 40 per cent in FY’13. Commenting on the health of the sector, the RBI said it remains satisfactory.

On reports of some improvement shown by the banks in th