According to the Economic Survey 2012-13, overall non-performing assets (NPAs) of the banking sector rose from 2.36 per cent of total credit in March 2011 to 3.57 per cent in September 2012.
Slowdown and the high leverage levels have caused loans to a few industry and infrastructure sectors turning NPAs, the survey notes. Sectors particularly under stress include textiles, chemicals, iron & steel, food processing, construction, and telecommunications.
Gross NPAs of public sector banks rose from Rs 59,972 crore in March 2010 to Rs 144,437 crore in September 2012.
It may be noted that the rise in NPA is caused by several factors like the economic slowdown, a rise in interest rates and aggressive lending in good times.
But the survey said gross NPAs of public sector banks were at manageable levels. However, to avoid an adverse impact on balance sheets, these had to be monitored, the survey added.
The economic slowdown, the rise in interest rates and aggressive lending in good times led to a sharp rise in bad loans. A switchover to system-based identification of NPAs by state-owned banks also aided the rise in stressed assets, the survey notes.
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