Banks’ stressed assets spike to 12%: RBI 25/08/2016

Banks’ stressed assets spike to 12%: RBI
25/08/2016 12:32

The level of stressed assets in the banking system continue to cause headaches for the Reserve Bank of India (RBI) which is about to witness a change of guard as outgoing governor Raghuram Rajan gives way to Urjit Patel early next month after a three-year run.
According to media reports, Deputy Governor of the RBI SS Mundra has said that bad loans and restructured assets in the country’s banking system stood at a mammoth 12 per cent at the end of the June 2016 quarter.
The above percentage is even higher for public sector banks with 15.4 per cent of their loans either turning bad or having been restructured, adversely affecting their operating and financial performance lately.
“The level of stressed advances which include NPAs and restructured assets for the industry, it is around 12 per cent but for the public sector banks, it is around 15.4 per cent as of June 2016”, Mundra said, the PTI reported.
Mundra added that toxic loans are the reason for the return on assets of state-run lenders turning negative and pushing them into net losses, as he called for strong structural and governance reforms to lift the sagging banking sector out of its NPA mess.