Stock markets in India have continued their momentum and are presently trading on a positive note. Sectoral indices are trading on a mixed note with stocks in the realty sector and finance sector witnessing maximum buying interest. IT stocks are trading in the red.

The BSE Sensex is trading up 75 points (up 0.2%) and the NSE Nifty is trading up 19 points (up 0.2%). The BSE Mid Cap index is trading up by 0.5%, while the BSE Small Cap index is trading up by 0.8%. The rupee is trading at 64.43 to the US$.

In the news from banking sector… Finance minister Arun Jaitley said that the Reserve Bank of India (RBI) is drawing up a list of debtors with bad loans that need to be resolved under the insolvency law.

He further said that there are already about 81 cases filed under the IBC and 18 of these have been initiated by financial creditors.

On subdued loan growth, Jaitley noted that banks are making their best efforts.

Mr Jaitley had just reviewed the quarterly performance of state-run lenders and financial institutions. The finance minister has on various occasions said that the problem of bad loans is not systemic but limited to 30-50 accounts.

The minister is going to meet heads of public sector banks to discuss the issue of non-performing assets (NPAs) and the steps being taken by them to expedite the recovery of bad loans that have crossed Rs 6 trillion.

Please note that bad loans at state-run banks have grown more than Rs 1 lakh crore since April 2016 to Rs 6 lakh crore as of December 31, 2016.

To tackle the above problem, the Reserve Bank of India is pondering over initiating tough measures against willful defaulters.

While RBI’s measures to tackle NPAs is proactive, banks need to take their share of blame. In one of our recent editions of The 5 Minute WrapUp, we had highlighted how the banks’ return ratios had deteriorated due to their profits written off on account of NPA provisions.

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